Forgotten Real Estate Acquisitions (JJ 650)

Forgotten Real Estate Acquisitions

Transcript: 

Jack Butala:                         Jack and Jill here.

Jill DeWit:                            Hi!

Jack Butala:                         Welcome to the Jack Jill Show, entertaining real estate investment talk. I’m Jack Butala.

Jill DeWit:                            And I’m Jill DeWitt, broadcasting from sunny, southern California.

Jack Butala:                         Today, Jill and I talk about forgotten real estate acquisitions. Jill got all excited before at the beginning of the show.

Jill DeWit:                            I know. I’m like, “What is this topic about?”

Jack Butala:                         No, that’s not what you said. You said, “Oh, my God, what is this topic about now?”

Jill DeWit:                            Thanks a lot. Alright, Jack. Lay it on me. What are we talk … I’m lost. Where are we going with this one?

Jack Butala:                         And this is what I said. We have a database, an old, old database, that we reinstated recently. It’s one that I used, actually, almost before Jill, I think. There’s 6,000 or 7,000 transactions in there that the client purchased based on mailers and stuff for a lot of reasons that we’re going back through now ’cause we’re much more sophisticated and …[inaudible 00:00:59] more experienced?

Jill DeWit:                            I can’t want to talk about this. Oh, I have some thoughts on this.

Jack Butala:                         It’s truly, in a real sense of the word, awesome. But before we get into that, let’s take a question posted by one of our members on the JackJill.com online community. It’s free.

Jill DeWit:                            You’re right. When you told me what the topic was about, a light bulb went off in my head and I just got excited. That’s awesome.

Jack Butala:                         We have different staff now and all of that.

Jill DeWit:                            Oh, so much to share. Okay. So, Jason L. asks, “I’ve been doing some research on properties in the southeast portion of the country. I’m looking for another county to mail. I’m noticing a growing trend. The land for sale is not where it’s supposed to be.”

Jack Butala:                         What?

Jill DeWit:                            That’s funny. “There are 10 properties in Alabama and only three are actually in Alabama.” Where is he looking at, I wonder? “Some even say they’re in Colorado or Nevada and I’m noticing this: Alabama, Georgia, Florida, South Carolina, and North Carolina so far. I’ve not ventured outside of that area. If you have properties on Land Pin, would you do a quick check for accuracy?” Ohh! “Just an observation and it might help sell them faster because it will be in front of the correct buyers. I only found this out because I’ve been [inaudible 00:02:09] for a third acre in Alabama. When I click on some of the properties, it says they’re close to Pike’s Peak.” Hmm. “Hope this helps.”

Kevin, I have a couple of people that added some comments to help this individual. So let’s see what he says. They say.

Excuse me. Kevin F. said, “Jason, when that happens to me, I find that it is user error. In most cases it is V.A., Virtual Assistant error. If you don’t check your listing, you’ll never know. Be careful.”

Jack Butala:                         It’s great when I don’t have to answer the questions. And echo that times 80.

Jill DeWit:                            And Luke S. actually added into and says, “Yep, I have caught some of them from time to time. Jefferson County in many states, or Jackson County, kinds of names things groom up to.”

That’s true too. Sometimes there can be Jefferson County, Texas, Jefferson County, Nevada, Jefferson County, North Carolina, Jefferson County, whatever. That happens … and I have had some Virtual Assistance in other countries. You do have to check their work because they’re doing their best, but it’s not perfect.

Jack Butala:                         What’s the difference between men and women?

Jill DeWit:                            Uh-oh. One difference?

Jack Butala:                         These 3 guys that piped in and one wrote the question and the other two commented, never alluded to the real issue. If it doesn’t feel right, it’s probably not right. That’s what a woman would say. Well, wait a minute, it’s Jackson County what? That doesn’t make any sense. There’s no trees in that area. So if it doesn’t feel right, it’s probably not right and Virtual Assistance, God bless them, especially if they’re not in this country, they just do what you tell them to do.

Jill DeWit:                            Mmm hmm.

Jack Butala:                         So if you tell them to do some stuff wrong, and speaking about myself more than anyone …

Jill DeWit:                            Right.

Jack Butala:                         … they’re not going to do it right.

Jill DeWit:                            Right. You have to add a little check in there about check in the county, check in the state, maybe have a double check at the very end when they post it. Go back and look it over.

Jack Butala:                         Yeah. You have to have a system.

Jill DeWit:                            Check the county, check the state.

Jack Butala:                         Exactly.

Jill DeWit:                            You know. All that good stuff.

Jack Butala:                         That said, I’m going to tell you a quick story about a piece of property that I bought on an Indian reservation. If you know anything about out west here, really anywhere, you can’t buy property on an Indian reservation. It’s not even subdivided. There’s really no APN, so it was a long, drawn out, I’m going to save everybody from it now, but we worked it all out.

Jill DeWit:                            That’s all you’re going to tell us?

Jack Butala:                         And when I say “Worked it all out”, I say, I mean, I conceded to just forget about it.

Jill DeWit:                            Great.

Jack Butala:                         I did buy a piece of property was on the reservation …

Jill DeWit:                            I still can’t …

Jack Butala:                         … and it’s in Northern Arizona and it got subdivided incorrectly. It was one of those things where I could fight it and spend a ton of money and time on it, or I could just say “You know what? You’re right.  Forget it.”

Jill DeWit:                            Right. Walk away.

Jack Butala:                         Yeah.

Jill DeWit:                            Yeah, I hear ya.

Jack Butala:                         It was in a huge group of properties, and I wasn’t staffed up to [inaudible 00:04:53].

Jill DeWit:                            That sounds like a revenue justification situation.

Jack Butala:                         That’s what it was!

Jill DeWit:                            Exactly. You know, I bought 50 parcels, let’s just say it was in the bundle that was in there. I made $850,000 off this whole thing. We can afford to walk away from that one.

Jack Butala:                         In the end, what I determined, is that when it got originally subdivided in the 50’s or 60’s, it encroached on the reservation. So at the end of the subdivision, there were a few lots that just encroached on the reservation and I think they were right. I think the subdivider was wrong, I was wrong, and I think the res was right.

Jill DeWit:                            Isn’t that amazing?

Jack Butala:                         Yeah.

Jill DeWit:                            Yeah and you’re right. Do you really want to go fight it?

Jack Butala:                         No.

Jill DeWit:                            Is it worth your time? No. That was a good decision, Jack.

Jack Butala:                         Yeah.  Today’s topic: Forgotten Real Estate Acquisitions. This is an amazing show! As I said earlier, or alluded to much earlier, we reinstated this old sequel-driven database that we created a long time ago and in there is, it’s called Canceled Acquisitions. Everybody knows, who’s in this business, you send a bunch of mail out. You send 2,000-3,000 mailers out. You get a lot of calls back. Some people are angry. Some people love you. Then people send mail back and they get signed. So, once you review all the positive comeback from a mailer, there’s only a certain number that you can buy. And here’s a few reasons why the deal looks great, but you couldn’t buy it. Well, somebody passed away, or there’s legal reasons or the person on the deed is not the person, for whatever reason, that you’re talking to on the phone and on and on and on. We put those in canceled acquisitions.

Well, if we’ve done almost 16,000 deals now, I can tell you there’s about 6,000-8,000 properties in there that, for whatever reason, at the time, we could not do the deal or we chose not to do it. Maybe the fruit …

Jill DeWit:                            That’s what I was wondering too.

Jack Butala:                         … the fruit wasn’t low hanging enough.

Jill DeWit:                            Right.

Jack Butala:                         Or, like Jill said, and she’s right, earlier: Some of them we just couldn’t find.

Jill DeWit:                            Right.

Jack Butala:                         Technology is so different now.

Jill DeWit:                            Exactly. I was thinking that was the days before … Even when I started, I mean, we really only had Parcel Fact going for maybe, not even a year have we had Parcel Fact. And you can just pop in. Here’s what’s going on for those who are new listening to us: Most of these properties, when you’re doing rural, vacant land, they do not have a street address. So, good luck finding them.

In the old days, we would get out GPS maps, and even then I couldn’t download them online. I had to get them from the county and they’re like, literally, mailing me rolls of maps. And you have to sit and I did have Google Earth back then, but I’m sitting here trying to, yeah that wash looks like the wash here and some you just couldn’t find the properties. Well nowadays, we have, and we didn’t have some of the programs that we have now where I can, you know, we have all the data. Or I can go to my source. I can go to Title 365, which we and all our members have that I can just put in the APN and I can get the center GPS coordinates. Even that’s a dream. We didn’t have that back then. So, now like with Parcel Fact, I can just pop in the APN and I get the whole thing. I mean, it’s mapped out. You could have 19 or 23 different points on the weird, parcel shape and I got the whole thing.

So, that’s the thing, there’s a lot in there that I’m sure, Jack, that are good acquisitions. We, at some point, you just have to walk away. Back then, they’re like, if I’m going to spend 2 hours longer and still try to find this property, or I’m just going to close these 6 over here, I’m just going to put that one aside.

Jack Butala:                         That’s right. Put that one aside. Well-said. So, that’s what it’s like.  These 5 great ones here. They’re real simple, they’re easy to do. We have 2 or 3 people working with us right now. Now we have way more than that. Back then, we had 2 or 3 people working. Should we really do this deal? You know what? No.

Jill DeWit:                            Right.

Jack Butala:                         Or the person wouldn’t call us back. It’s as simple as that. Yeah, loves the deal. Can’t get a hold of him. So illness is a big issue in this whole industry. People are older and they’re settling their estates, or they’re kids are settling their parents’ estates and they’re just hard to get ahold of because it’s not a high priority.

So I had my new assistant run through a couple of calls and it worked out great. They, heck yes, wanted to sell. Now she’s running through the whole thing.

Jill DeWit:                            That could be cool.

Jack Butala:                         She’s running through the whole back list.

Jill DeWit:                            That’s so cool.

Jack Butala:                         This isn’t even deep, deep stuff. This is the stuff that we just kind of passed over in the last 3 years.

Jill DeWit:                            Who knows what she’s going to uncover in there?

Jack Butala:                         I know.

Jill DeWit:                            I mean it’s really cool. It’s amazing.

Jack Butala:                         I kind of thought about looking at, if you have an old box of coins …

Jill DeWit:                            Uh huh.

Jack Butala:                         … her dad was a coin collector and so I still have an old box of coins that I know, I know nothing about coins, and I’m not really that interested in it, but I know that there’s some crazy valuable stuff in there.

Jill DeWit:                            Right.

Jack Butala:                         And me just looking at it? I don’t know.

Jill DeWit:                            Right.

Jack Butala:                         I’d have to send it somewhere and show somebody, but it’s kind of like that. It’s like what’s in there?

Jill DeWit:                            Exactly. Like, oh my gosh! Look what I just found! Like, you joke about finding $1,000 in your pocket. Just like that! So that is so cool!

Jack Butala:                         A lot of it is, which is why I wrote this topic. We were just so much better at this, then we were, even 8 or 10 years ago.

Jill DeWit:                            Right

Jack Butala:                         We’re just more experienced, so we ask different questions from sellers to fix stuff.

Jill DeWit:                            Isn’t that true?

Jack Butala:                         And back then, it was just like, eh, I don’t like the tone of your voice. Next deal.

Jill DeWit:                            Well what you tell, because we have a lot of new members that are running into the same thing, like new members are sending out mail, they get stuff back, and like one of the things that I’d say is, “Don’t get hung up on that first deal yet. Get 10 in and review them. See how much money you have to spend, your acquisition funds, so you can buy, so you could afford 5. Great! Buy the top 5.” What would be your advice to them for moving forward so they don’t get in the situation, or maybe everybody will. I mean, is it just inevitable?

Jack Butala:                         Yes.

Jill DeWit:                            Oh.

Jack Butala:                         But, your question is correct. Entirely correct. Number 1: keep track of it. Make sure it’s in a database somewhere and you give it a status called canceled or overlooked or [inaudible 00:11:11] too high.

Jill DeWit:                            Pass.

Jack Butala:                         Or yeah. Number 2, what we didn’t have back then, but we have now, is a group of people.

Jill DeWit:                            Yeah.

Jack Butala:                         So, what if, there are groups of people in here … The number 1 reason that the properties got passed over was the fact that we couldn’t directly and easily title it. So, we looked it, we loved it, we loved the price, but the person we were talking to, it was in someone else’s name; usually their parents. Their parents passed away, the property didn’t properly get conveyed before they passed away, so it had to be part of an estate and none of that was done correctly mostly because the kids didn’t even know the parent’s own it.

Jill DeWit:                            Right.

Jack Butala:                         And they got a tax bill the next year …

Jill DeWit:                            Right.

Jack Butala:                         … after the estate was settled. So, there are people in our group that specialize in that: quiet titling property and all that.

Jill DeWit:                            It’s true.

Jack Butala:                         And I would take that property, here’s my advice: I wouldn’t let it go to waste. I would send it over to someone else in our group who specializes in that and split it with them.

Jill DeWit:                            I hate to tack on work, but you’re making me think about some stuff because I, honestly, just had a member reach out to me, literally yesterday, and I forwarded it to our team because they were like, “Hey, I heard you guys talk about some of these deals that you pass on.” Because now, I’m sure this is what’s going to happen too: as she’s going back through this inventory, there’s some that we would still pass on because they’re too small. They don’t meet our criteria. I don’t need to buy things for $500 and sell it for $1,500 …

Jack Butala:                         15, yeah.

Jill DeWit:                            But for a lot of our group, they’re like, “I would love those deals!” Because we’ve already done the work and cued them all up and I have all the contact information. So, that would … Not to create work for anybody on our staff that might be listening, but this is one of reasons they don’t listen to the show. So anyway, they don’t know what’s coming. But we should probably bring that back to and make that … That’s why we started our deal board way back when. So I could just throw things in there and then I just got so busy, I haven’t been able to update the deal board.

Jack Butala:                         Right.

Jill DeWit:                            So our members are already doing this with each other like you’re talking about.

Jack Butala:                         Very successfully.

Jill DeWit:                            Yeah, and we want to make sure everybody is sharing these estate situations. We have people in our group that can work them out.

Jack Butala:                         Somebody’s got a good idea about how to orchestrate this, I’d be happy to do it.

Jill DeWit:                            Yeah.

Jack Butala:                         Because, here’s the problem: Okay, great, we have this $500 deal. It takes a little bit more effort than we are used to and it’s too small for us. What do we do? Post it on deal board. 900 people want it. Who do we give it to?

Jill DeWit:                            Right.

Jack Butala:                         Then, how do we track it?

Jill DeWit:                            Yeah.

Jack Butala:                         Did it close? Did it not close? Is there some kind of mechanical … There’s just a lot of issues with it.

Jill DeWit:                            I know. I’m tempted to bring in somebody to work for free and if they want to manage them or take them, I don’t care. Here ya go!

Jack Butala:                         Even if anybody who’s ever had kids. You can’t just give one kid an ice cream cone. The other one will rip their eyes out. And then at some point …

Jill DeWit:                            It’s like how Jack …

Jack Butala:                         At some point, both parents look at each other and they say, “Let’s just not get any ice cream at all.”

Jill DeWit:                            Jack, I love it. You’re famous for telling different kids different things. It’s like, the same thing. You’re my favorite, you know, you’re my favorite, you know, you’re my favorite. Depending on the day or the situation. I think that’s hilarious. I love it.

Jack Butala:                         When they’re all together, I love saying, “I love two of you very much.”

Jill DeWit:                            Yeah.

Jack Butala:                         And there’s three of them.

Jill DeWit:                            I know! It’s not cool.

Jack Butala:                         I think it is.

Jill DeWit:                            It’s just not cool! Jack! Thank you.

Jack Butala:                         Hey, number 1, if you’re listening to this at all, you’re on the top of my list right now.

Jill DeWit:                            Oh yeah, she is.

Jack Butala:                         She is rocking it.

Jill DeWit:                            Yep, she is.

Jack Butala:                         For a lot of reasons.

Jill DeWit:                            That is awesome.

Jack Butala:                         Well you’ve done it again. You’ve wasted another 25 minutes listening to the Jack and Jill Show. Join us tomorrow where we discuss how retirement just stopped being a goal after a while. This is so easy.

Jill DeWit:                            Oh this is a good one. And we answer your questions, should you have one. Post on the jackjill.com online community. It is free.

Jack Butala:                         You are not alone in your real estate ambition.

Jill DeWit:                            You know what’s funny, this topic because we constantly have properties that would go … seems like sometimes there’s more nos than yes’s, you know what I mean? Because I can be picky.

Jack Butala:                         Here’s what my assistant having a tremendous amount of luck with. Not luck, she’s very skilled, but what’s working for her. We went back through the list and she said this Apache County 40 acre property, everybody agreed to a $6,000 price. What’s the problem? And she’s staring at me and it’s a good question. I said the problem is the price. Look at it. The property is good, the whole thing, we’re just not kinda into this anymore.

What if I can get it for $2,000 then? That’s what she says and then I walk away. This is just one example and she comes back and says, “I got it for $2,500.” Now, how do you say no to that?

Jill DeWit:                            Right.

Jack Butala:                         98% of the work is done.

Jill DeWit:                            Exactly.

Jack Butala:                         There’s like 500,000 properties, not 500,000. There’s about 5,000 properties in there.

Jill DeWit:                            Yeah, there’s a lot. This is good.

Jack Butala:                         The other thing that we didn’t talk about on the real show is that the seller’s situation has changed dramatically over the last 10 years.

Jill DeWit:                            Oh, yeah!  They still have it?

Jack Butala:                         If they still want it, you’d be surprised.

Jill DeWit:                            That’s very true.

Jack Butala:                         And I asked her, I said, “Please ask them if they remember talking to us.”

Jill DeWit:                            That’s funny.

Jack Butala:                         Because if they do, if they remember talking to us 4 years ago and nothing happened, they’ve been paying the taxes now for 4 more years.

Jill DeWit:                            Exactly.

Jack Butala:                         It’s not hard.

Jill DeWit:                            Yep. That’s hilarious. Share the fun by subscribing on iTunes or wherever you’re listening. And while you’re at it, please rate us there. We are Jack and Jill.

Jack Butala:                         Information,

Jill DeWit:                            And inspiration.

Jack Butala:                         To buy undervalued property.

 

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