We are in for the Long Haul (JJ 668)
We are in for the Long Haul
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 am Jill DeWit broadcasting from sunny, southern California.
Jack Butala: Today Jill and I talk about how we are in it for the long haul. Those specific signs that you just know that you’ve turned the corner. You’ve done a few deals and you’re in it for the long haul.
Jill DeWit: I thought it was going to be about Jill, are you wearing the data is the new bacon t-shirt again? Because you’re just so in love with data now which I never was.
Jack Butala: That’s one of the signs.
Jill DeWit: Thank you.
Jack Butala: Did you ever hear those jokes like you might be a redneck.
Jill DeWit: Exactly. Here’s how I know. Every vacation is not really a vacation. It’s just … Every vacation is not a vacation. It’s only a new area to check out property.
Jack Butala: That’s what it is. That’s one of my signs.
Jill DeWit: We haven’t scoured this area yet. I didn’t know we’d be looking at property here Mazatlan but I guess we are.
Jack Butala: It’s just a new data set. Everything’s just a new data set.
Jill DeWit: Exactly. Hey Jill, while you’re in Seattle next week, will you please drive by these locations for me and take some pictures? Yes.
Jack Butala: You know it’s funny you bring up Seattle. It’s one of the lowest days on market environments in the country. For some reason, they can get deals done in Seattle, house deals, in six, seven, eight days.
Jill DeWit: Here it comes. I’m waiting for it. I’m going to be there.
Jack Butala: Before we get into it, let’s take a question posted by one of our members on the jackjill.com online community. It’s free.
Jill DeWit: Okay. Steven K. asks: I’m wrestling with whether to let my buyers handle the final closing documents for filing with the county. As another member, Luke, has pointed out to me, they will screw it up is a possibility. True. The transfer tax is almost 2% though and recording is $75 for the first page.
Jack Butala: Hello California.
Jill DeWit: Right. So I’m contemplating whether to send a closing documents package with instructions or biting the bullet and just paying these fees myself and interfacing with the county.
Jack Butala: Jill and I are going to agree on this.
Jill DeWit: I will need original signatures for the transferred tax document from the buyer anyways though so I’m struggling a little bit with which way to go.
For me, do you want me to answer?
Jack Butala: Yes.
Jill DeWit: For me, not a big deal. Honestly.
Jack Butala: Which way would you do it? You have your seller …
Jill DeWit: I’ve done it both ways.
Jack Butala: What he’s saying is this. You post a piece of property on the internet for sale, a $5,000, five acre property in California. And somebody says, I want to buy this property and you say, great. I’m going to send you a bill or click on the thing. Charge the credit card. Okay, great. You bought it. You send them a deed package and you sign the deed over to them. A deed is not a contract, by the way. It’s just your signature and you have two choices at that point. You have the money and you’ve conveyed the property and it needs to get recorded. That’s the final step. You have two choices. You can record it for the buyer as a courtesy.
Jill DeWit: Meaning you don’t send it to them, you’re sending it straight to the county.
Jack Butala: Or you can send it to them with the instructions. Here’s a pile of paperwork. Good luck. Figure out the transfer tax, figure out the whole … I will tell you from experience, 20% of the people that you do that with, 20-25% will never record the property.
Jill DeWit: True. They don’t even know sometimes. They get it. They look at this deed. They think it’s like a pink slip and it’s all done and they just put it in their files and they walk away. And it’s not the end of the world.
Here’s the downside of that. The guy has it. It’s in his safe. He thinks it’s all done and it’s all cool. He really has no idea. He didn’t read your letter at all. So all that’s going to happen, Steven, is you’re going to get the tax bills forever and you’re just going to shred them and throw them away, not even worry about it. Because it’s really not your responsibility. Someday, hopefully he’ll figure it out and record it like when he wants to resell it kind of thing. Or transfer it to somebody else.
Jack Butala: If you’re selling properties every week, trust me. You want to record it for your buyer. And you want to charge them for it. It’s a revenue source. We charge $400 bucks to record a deed.
Jill DeWit: That’s what I was going to say. Sorry I lost my train of thought there.
Jack Butala: So, like I said … I’m saving you.
Jill DeWit: Save me? You made me lose my train of thought.
Jack Butala: What?
Jill DeWit: It’s all good. No, okay. So you record it … Well, here’s the problem. That’s what I wanted to say. So, let me … what I was going to say was you send it to him and these tax bills are coming in. Here’s what could happen. Huh, speaking from experience here. You have staff changes. Things get moved around. These tax bills keep coming in and after three years of the same tax bill, somebody might think we might actually own it and in their best interest, your best interest, they research with the county and say, oh, this one must have fallen through the cracks and they roll it back into your inventory. We’ve done this and we caught them and so you have to make sure and check that because that could get rolled back into your inventory and until you go back and look and say, no I sold it. The guy just never did the deed. You have to be careful of that. So you might create some extra work.
So what Jack’s saying, which is true, and we on some of these, more now because we’re so good at recording and we’re just doing so many deals. It’s just too easy. I will charge an extra fee and do it for them. And just say, hey, look. I’ll make it easy for you. For $50 bucks you won’t have to think about or whatever. If the recording fees are $75, I might even work out something nice. But you know, the fact that I’m doing the work is a big deal right there but we’ll record it for them and then it’s all done.
And then, what I do though, the sellers still want to have something in their hands. I’ll help everybody here. You might say, okay, I got your money. I’m going to record it. Just watch for county. Technically, you could do this. You could say, I’ve got your money. The deed is done. I’m sending it in to be recorded or doing an online recording, however you’re doing it, today. And you will get your final notification that it’s done and recorded because it will come directly from the county to the buyer at that point. But this is hard for these buyers. In some counties, it may take weeks, even months for them to get that stuff to them depending on the county.
So I still will usually, well, we could scan it in … Well, depends on the person or we’ll send them something because they always like to have something in their hands showing that it’s done and that’s just an extra nice step and they love you.
Jack Butala: Yeah, it’s just basic consumer behavior. When you buy something, you want to get something.
Jill DeWit: Exactly. The other thing why I do that too is I want them to have something in their hands and I’ve put in there a note that says, if you have any questions, call the county. Because at that moment, technically, I’m out of it. And I don’t want this buyer calling me back like I haven’t got it back, I haven’t got it back. And I have to keep saying call the county. I try to make it real clear though. No, I’ve sent it to the county. If you have any questions, call them. Because that’s really what they should do at this point. Say hi, this was sent to you on the first. I’m just waiting for confirmation. Can you tell me if it’s been recorded? That’s really how it should go.
Jack Butala: You also could … What we do in an automated fashion is with land is when somebody clicks a button and buys a piece of property, they get a deed the next day. They get a copy of the deed PDF style so they say, here’s your deed. We’re recording it for you right now. Thanks very much. Here’s a phone number if you have any questions. That just gives a sense of … It stays off of causing concern or trust issues or any of the internet things that could possibly go on.
Jill DeWit: Right.
Jack Butala: Your job is to make the person feel as comfortable as possible. Because let’s face it, doing a real estate deal on the internet is just a little bit weird. I don’t get this question too much at cocktail parties anymore but it used to be maybe 8-10 years ago, people would look at me and say, what kind of nutcase are you that you buy and sell real estate on the internet?
Jill DeWit: And you’ve never stood there. You’ve never looked at it? What do you mean you’ve never looked at it? And then you sold it? Well, how can you do that?
Jack Butala: Exactly, Jill. So you want to do everything you can to make sure that everybody is happy and they own it and all of it.
Jill DeWit: Exactly.
Jack Butala: The struggle is a lot of these counties are real rural so it takes them a long time to do stuff. It takes them a long time to record. You don’t see it in the buyer’s name for quite some time so there’s issues that happen. But Jill’s right. You can wrap it all up in a doc prep fee. That’s what we call it. It’s $399. $399 for doc prep fee and we record the property for you. And they just build it into the price. People are used to paying extra. I don’t know where or how this happened in our country but people are used to seeing the price of something is $100 and then but it’s really $120 at the end with taxes and these destination fees and the whole thing.
Jill DeWit: Exactly.
Jack Butala: So use that to your advantage at this point.
Jill DeWit: Destination fees. Have you bought a car recently?
Jack Butala: Yes, I have.
Jill DeWit: Wonder where that came from?
Jack Butala: Today’s topic, the signs that we are in it for the long haul. Like we alluded to at the beginning of the show … Oh, this is the meat of the show. What are the signs that happen where all of a sudden you catch yourself doing something that’s not normal and it’s like man, you had that real estate itch. You have borderline issues with your career.
Jill DeWit: Well, one of them you just said. It’s like you’re at a dinner party and you’re like, what do you mean? Yeah, we do it all totally online. What’s your problem? It’s not a big deal.
Jack Butala: Jill was communicating to me recently that she was at an event where there were a lot of people talking, standing around and talking. And one person worked for Apple computer and they couldn’t wait to not work for Apple computer because they found out what she does for a living and everybody stops what they’re doing and they say, what do you mean you buy and sell houses and make money?
How many diamonds are you wearing right now?
Jill DeWit: That was actually funny when you said that. I didn’t realize what I put on that day.
Jack Butala: Everybody wants to flip houses or they think they do. I blame HGTV.
Jill DeWit: I do too.
Jack Butala: So Jill, what do you think are some of those signs that you may have an unhealthy …
Jill DeWit: Oh my gosh.
Jack Butala: The title says you’re in for the long haul. What are some of the signs? But really, I think there are some unhealthy pathological addiction that goes on to be that successful in it like we are.
Jill DeWit: Okay, one of them is you can’t drive down a street like a normal person and just look at the scenery. You know you have this problem. You know you’re in it for the long haul when you have a Redfin app constantly open and everywhere you go you’re going, hey, that just sold for 2.1. Hey, that’s this.
Jack Butala: Are you speaking from experience?
Jill DeWit: Yes. No, it’s a good thing though. I think it’s a good thing.
Jack Butala: Jill and I have not driven in a car together where I’ve actually driven in a long time. I always sit shotgun and I look at on the screen saying my gosh, there’s a pocket of potential subdivision.
Jill DeWit: It’s fun. Hey, what’s that worth?
Jack Butala: Right.
Jill DeWit: We do that. Yep, that’s just how we drive around.
Jack Butala: Look how that’s presented.
Jill DeWit: That’s true. That’s another one. You look at these … You’re on social media critiquing other sellers and buyers. I do that all the time. I’m like, okay, that was stupid. Why did you pay that? I’m constantly doing that. I see … because you and I are in social media on all these Facebook groups where there’s a lot of properties floating around and a lot of people trying to sell assets and what you’re talking about. They renovated them and they put them back out there. And I’m still not totally in agreement with their pricing on all of them. So, that’s an issue. When all of your … You used to be looking to see who’s having babies and now you’re just looking to see who’s doing deals.
Jack Butala: It’s true.
Jill DeWit: There’s a sign you’re in it for the long haul.
Jack Butala: I never went through the baby stage.
Jill DeWit: Well, yeah.
Jack Butala: Or some version.
Jill DeWit: Or who got promoted. You’re looking at your friends. Oh look who went to the show or they’re traveling. No, all my Facebook and you could easily tell too. Facebook’s made some recent changes where they’re really trying to pull up what you look at the most, they can tell. And none of mine is social. It’s all business.
Jack Butala: Oh yeah. I don’t have a social Facebook presence. It’s all real estate driven.
Jill DeWit: So funny. Yeah. Trying to think what’s another good sign?
Jack Butala: I said to myself before we started this episode. I’m not going to use the obsessed word. But it’s obsessed. If you are really … I spend every waking hour. Not every waking hour. I spend every waking work hour looking and reviewing on how to do a deal faster or looking for diamonds in the rough. Like wow, this is a good market. Or wow, this is a great townhouse/condominium complex. It’s grossly undervalued in my opinion for the location. Or essentially just finding a diamond in the rough where you can buy a piece of real estate, do nothing to it at all, market it in a different channel, and sell it for more. That is really what I look for. Everything else is an offshoot of leading back to that.
So if I say, wow, that house is really … Whoever rented that house is perfect for the environment. They did this, this, minimal cost. That’s really what I’m saying is they created some value. Or created some equity in a real estate deal. And it almost never has to do with renovation and almost always has to do with finding a pocket on a map, a pocket of property, that’s just a little bit outside the mainstream that’s half price.
Jill DeWit: Right.
Jack Butala: Like north in Los Angeles here up in the mountains. There’s all these little mountain cabin communities and if you go slightly, maybe three to four to five miles out of the ring of properties, I mean, there’s a massive, dramatic reduction in price. I mean, I’m talking about $600,000 or $700,000 cabins and then two or three miles out of that, you can buy dirt that’s buildable, that’s ready to build, for less than $10,000. That’s an easy sell. We have members that are killing it out there. For whatever reason, we haven’t chosen to purchase land in those communities yet but it’s probably because we’re having so much luck with houses right now.
Jill DeWit: I know.
Jack Butala: But that’s what I look for.
Jill DeWit: What’s another funny thing that you’re in it for the long haul. I’m trying to think. What do I do? I know what you do and you’re always thinking about it.
Jack Butala: I’ve wrecked your vacations. I know it.
Jill DeWit: That’s okay. No, it’s all good. You know what? It’s what you love to do. And me too. You know what? You know you’re in it for the long haul when you don’t think about anything else. There’s no part of me that says, you know, I think I want to do x or gosh, I’ve always wished …
Jack Butala: Like you’ve considered another career?
Jill DeWit: Yeah, that’s what I mean.
Jack Butala: Geez, I haven’t done that since I was 19.
Jill DeWit: Right.
Jack Butala: You’re right, Jill.
Jill DeWit: And you know what else? I’ve never even considered working for somebody else. There’s no way. I couldn’t go back.
Jack Butala: Yeah, why would you?
Jill DeWit: Isn’t that funny? And I’m not afraid anymore. I know a lot of people that look at us and go wow. They love the idea of being their own boss but the thought of having employees and having that responsibility is too overwhelming for them to take on. But for us, I’m like, no we got this. I am so confident in what we do that I don’t worry about our employees.
Jack Butala: I was just going to say that word.
Jill DeWit: I don’t worry about paychecks clearing. I don’t worry about the money in the bank. I don’t worry about any of that.
Jack Butala: I have deal confidence. And I remember when it happened. Because when you start out, it’s like man, I did everything that the guy said to do. I sent the letters out. They came back. I don’t know. I just don’t know and you have to get over that. I’ve gotten over it long since but that is a sign that you’re in it for the long haul.
Jill DeWit: Yeah.
Jack Butala: if you get a property back, you look … spend four minutes on the internet. You’re researching the whole thing and you say, yep, we should buy it or no, I know we offered $7,000 grand but at $4,000 grand, that’s a huge insurance policy. Bang, bang, bang. That level of deal confidence, you’re in.
Jill DeWit: Yep. And I don’t worry because what do you do? Like even our members, send out more mail.
Jack Butala: Yep.
Jill DeWit: You’re never going to run out of deals.
Jack Butala: It’s not possible.
Jill DeWit: Dude, I gotta tell you this. I was looking last night. I’m on social media, right? And this thing pops up where this guy’s selling a program.
Jack Butala: Welcome to Jill’s ambition.
Jill DeWit: This guy’s selling this program …
Jack Butala: Jill’s just turned the corner.
Jill DeWit: … and it said, here’s how to get two deals a month. What the heck. Who pays money to follow somebody’s program for two deals a month? We’re talking two deals a day.
Jack Butala: I know.
Jill DeWit: We could do more than that.
Jack Butala: My gosh.
Jill DeWit: I don’t understand what has to go so wrong that we think that’s really, really good and we’re selling this as a positive thing.
Jack Butala: I’ll answer it. Because they’re not in it for the long haul. It’s not an obsession. It’s a side business.
Jill DeWit: I just figure they don’t know what they’re doing.
Jack Butala: It’s just a side business. So you want to do two deals a month, you said.
Jill DeWit: He’s saying this is a great, I’m winning. I do two and I could teach you. What?
Jack Butala: It’s just like you said a couple episodes ago that it’s all relative. Money’s relative. Two deals a month for somebody … If they’re two house deals a month and they’re making $10,000-$20,000 bucks, that’s not so bad, Jill. $40,000 bucks a month is pretty good. But I agree with you. I think that’s a perfect example of they’re not really taking it serious like a career.
Jill DeWit: Or maybe they just don’t know what to do. That’s my other thing too. I’m here to tell you, man, if you want two deals a month or two deals a week or two deals a day, we can help you. That’s what we do. Just turn it up, turn it down. There’s no shortage of property out there everyone. Seriously. Whether it’s land, whether it’s a house. We haven’t even started to talk about apartment buildings. We’ve talked about … You and I have talked about a little bit in the past, we having been focusing on it right now but you guys, it’s out there. It’s not a problem. You want your phone to ring? Oh, we’ll make your phone ring.
Jack Butala: Exactly.
Jill DeWit: There you go.
Jack Butala: Like I’ve always said, if you can do two deals a month, you can do 200. If you can do 200 deals a month, now it’s a system situation. The deals themselves are incredibly easy to find but processing that many transactions takes a whole different talent.
Jill DeWit: That’s true.
Jack Butala: That’s another way you know you’re into this for long haul. When you’re setting up systems to set up that many deals.
Jill DeWit: That’s a good point.
Jack Butala: And guess what happens when systems are set up to process two, then 20 deals, then 200? And now, it’s 2,000. It just never stops.
Jill DeWit: Exactly.
Jack Butala: Finding the deals is easy. Maybe that’s how you know. When you say that sentence, think about Luke Smith, one of our real successful members. You think he’s in it for the long haul?
Jill DeWit: I don’t know.
Jack Butala: You think he’s got the deal confidence?
Jill DeWit: Maybe. I think he does.
Jack Butala: He does more deals than us.
Jill DeWit: Yep. I love it.
Jack Butala: Well, you’ve done it again. You’ve spent another 20 minutes with us listening to the Jack and Jill Show. Join us tomorrow where we discuss infill lots or large acre steals. Which ones are better for you?
Jill DeWit: And we answer your questions, should you have one, post it on our online community found on jackjill.com. Go there. It’s free.
Jack Butala: You are not alone in your real estate ambition.
Jill DeWit: That was good.
Jack Butala: Yeah, I think so too.
Jill DeWit: I like that. I’m trying to think of any … I’m trying to think of some other funny things that … I guess you know you’re in it for the long haul when you’re so far past it, you don’t even think about not being in it for the long haul.
Jack Butala: Right.
Jill DeWit: It’s like there is no other option so if anything crazy happens. Let’s just say anything really, really crazy catastrophic happens. The business is never going to go away. We’re just going to change how we do it.
Jack Butala: I’m going to ask you a couple of questions here in the after show.
Jill DeWit: Okay.
Jack Butala: Any previous job you’ve ever had, did you know you were going to be there forever? Did you just accept it?
Jill DeWit: No.
Jack Butala: Me either. How about a previous relationship. Did you know you were going to be there forever?
Jill DeWit: I thought.
Jack Butala: Me too.
Jill DeWit: Yeah. I tried. I wanted to.
Jack Butala: How about this relationship?
Jill DeWit: I’m trying. I want to.
Jack Butala: Jill, you’re hilarious.
Jill DeWit: In case you haven’t noticed, I’m in it for the long haul. How’s that?
Jack Butala: If you’re sitting around saying you know the only thing really stable in my life is my career.
Jill DeWit: That’s awesome. Oh wow. Okay, hey share the fun by subscribing on iTunes or wherever you are listening. And while you’re at it, hey, rate us there.
We are Jack and Jill.
Jack Butala: We are Jack and Jill.
Information …
Jill DeWit: … Inspiration.
Jack Butala: To buy undervalued property.
You know I adore you.
Jill DeWit: I know.
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