Everyone Needs a Place to Live (JJ 686)

Everyone Needs a Place to Live (JJ 686)


Jack Butala:                         Jack Jill here.

Jill DeWitt:                          Hi.

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

Jill DeWitt:                          And I am Jill DeWitt broadcasting from sunny, southern California. Normally sunny, not today.

Jack Butala:                         It is stormy and yucky today.

Jill DeWitt:                          It’s like I love it.

Jack Butala:                         Today, Jill and I talk about, everybody needs a place to live. And what does that mean to us real estate investors? I can’t wait to talk about this because something that’s so simple. You can really capitalize on it as a real estate investor. Especially in land because we don’t go look at the property. We don’t touch the asset. We don’t care.

Jill DeWitt:                          Does that mean we have a better perspective on it?

Jack Butala:                         It means that we have a way larger area to choose from as real estate investors versus the house people and your apartment people and all of that. We can cover the whole country and Canada.

Jill DeWitt:                          That’s true.

Jack Butala:                         With the data that we have.

Jill DeWitt:                          True. So when you’re talking everybody needs a place to live for this show, you’re talking land still or are you going to spill into houses and cover it all?

Jack Butala:                         I’m going to spill.

Jill DeWitt:                          Okay.

Jack Butala:                         We’re going to spill.

Jill DeWitt:                          You like my choice of words there?

Jack Butala:                         Yeah.

Jill DeWitt:                          Okay, thank you.

Jack Butala:                         Before we get into all of that, let’s take a question posted by one of our members on the jackjill.com online community. It’s free.

Jill DeWitt:                          Okay. Joe asks, “Hey everyone. So it sounds like I have a buyer who wants to offer on 160 acres in Alpine County, California. I have optioned the current owner and I have listed it for sale.” Awesome.

Jack Butala:                         Yeah.

Jill DeWitt:                          “The buyer has a real estate agent which is fine since it’s almost a $200,000 sale.” Wow. “The agent says that she can’t make an offer to anyone except the owner of record.”

Jack Butala:                         And your agent’s correct.

Jill DeWitt:                          “This being the gentleman who has signed the purchase option with me.” Uh-huh. “So this is my question. Has anyone run into this in the past? Is there a way she needs to phrase the offer letter? Another thought was I never recorded the option with the county. Is this required? Any help from people who have successfully complete purchase option sales would be greatly appreciated.”

Jack Butala:                         Here’s the real important thing here, Joe. You cannot represent an owner of a piece of real estate in the sale or purchase of it unless you have a license. And if you’ve listened to any other episode on this show, we’re not big not fans of real estate agents in general. So, this is not something you want to test or get around or manipulate. You want to do the right thing. There’s a system set up this way for a reason. And believe me, it’s to our advantage. Our advantage as unlicensed real estate investors.

                                                So you have a couple options here. Number one, you can ante up, buy the property yourself for less than $200,000 bucks and then resale it to this person. It doesn’t sound like that’s an option to you, that’s why you set up an option. However, if you have a contract in hand, there’s nothing wrong with you going out on a deal board here.

Jill DeWitt:                          That’s my thing.

Jack Butala:                         Pay for the property. Let’s say it’s $100,000 grand, hopefully. Get somebody in our group to ante up the $100,000 grand because you have a contract and then resell it immediately and make $200. There’s nothing wrong with that.

Jill DeWitt:                          Can I jump in?

Jack Butala:                         Yeah.

Jill DeWitt:                          That’s my favorite choice right there. I was waiting for you to cover it because I was like, that’s what I would do. It’s too easy to go hey everybody. Come on. I need somebody to help me out. Here’s this contract. Here’s that contract. We’re going to split $80,000 or $120,000, whatever it is.

Jack Butala:                         Right. People love that.

Jill DeWitt:                          I just need $80,000 or $100,000 bucks for five days.

Jack Butala:                         20 minutes.

Jill DeWitt:                          If that, yeah.

Jack Butala:                         The other way and this is much more likely is you write down in a … Get your Microsoft Word out and write an agreement out that says look, hey land owner. I can’t legally represent you and I have no desire to represent you in the purchase sale of this agreement. However, this is what happened. This person wants to buy your property. I’m opting out. I can’t represent you. And if in fact it actually happens, I would love to share in the profit. Please pay me $10,000.

Jill DeWitt:                          There you go. Just something. Make it nice.

Jack Butala:                         From the legal standpoint, there’s a lot of debate about well, you’re still representing the guy.

Jill DeWitt:                          It sounds like you assigned it to yourself.

Jack Butala:                         You’re still representing the guy but there’s an option there. At least you have it in writing that you’re not representing him and 99% of the time when the transaction goes well, there’s no issues with that. But I’m going to leave that for attorneys to debate.

Jill DeWitt:                          Well, can I add too, like you have said many, many times before which I agree with. The time that there’s a problem is when there’s a complaint.

Jack Butala:                         Right.

Jill DeWitt:                          So, when you’re upfront and honest with everyone and everybody knows exactly what’s going on and there’s no funny business, there’s nothing to complain about. You’re either in or you’re out. And that’s fine. Everybody can walk. There you go. I still like option B.

Jack Butala:                         Jill and I in the past have done …

Jill DeWitt:                          A or B.

Jack Butala:                         We’ve kind of done a reverse concept of this but we’ve done it with tremendous amount of success. Find a buyer instead of a seller. Find a buyer that loves to buy lots of rural acreage or loves to buy houses and find out what they really want, their real specific thing that they want, and sign an agreement with them that says if in fact we locate a piece of property, you will buy it and then pay us. We’re not going to represent you in any way. We’re just going to find these properties and send them your way. We’re not going to really even talk to anybody involved. Not the seller or any of that. Or maybe a little bit just to find out if it’s for real.

                                                That way, you’re really only representing one person and you kind of know the guy or the group and you’re acting as a contracted acquisition arm for them. So that has worked great for us in the past and a bunch of other people in our group too.

Jill DeWitt:                          Yep.

Jack Butala:                         Today’s topic: Everybody needs a place to live. Really, Jack? Oh, this is the meat of the show. Really?

Jill DeWitt:                          That’s my line.

Jack Butala:                         Does everybody really need a place to live?

Jill DeWitt:                          Thanks Captain Obvious. Exactly.

Jack Butala:                         You’re going to sit for 20 minutes and tell us that people need apartments to live in and houses to live in. And a few of us need to go live in a tent in the middle of nowhere for land. Right?

Jill DeWitt:                          Hold on a moment. I want to pause for a second and just say, isn’t this awesome? This is one of the beautiful things about this business and it’s not like they pick one place and they stop. I mean, let’s think about this. I don’t know where I’m coming up with sunglasses a lot lately but I don’t need to redo my sunglasses every year. And sometimes I don’t even need sunglasses or you know, whatever it is. Whether you’re doing jewel … I mean, there’s so many businesses that we could be in, Jack, that we’re not in, by design. And this is one of the reasons. This is stuff people need.

Jack Butala:                         Yep.

Jill DeWitt:                          Thank you. I’m done now.

Jack Butala:                         Here’s what we all have going on on our side in this business as real estate investors. We are experiencing population growth in this country and everywhere else in the world, just about everywhere else, in general, like never before.

Jill DeWitt:                          Right.

Jack Butala:                         And so, people need … I’m going to quote myself. Like I said before, people need a place to live.

Jill DeWitt:                          Right. I just heard that article when you and I were in the car recently in Scottsdale and it was a major grocery store … I don’t know if it was a Kroger’s or who it was but they planned to open 10 new stores a year … 10-15 or something crazy like that … new stores a year for the next 10 years just in the Phoenix area. And I went, holy cow. It might have even been a bigger number than that. That’s probably … because I was blown away whatever the number was. I should look it up and know my facts. But anyway, it’s big.

Jack Butala:                         Right.

Jill DeWitt:                          And that’s one market.

Jack Butala:                         Are they all moving to Kansas? No. Here’s how you capitalize on it as a real estate investor. Are they all moving to Kansas? No. But is Kansas, is the population growth going up there? Heck yeah. Here’s the three top real estate markets in the country. Central Arizona, Phoenix, the Phoenix metropolitan area, Las Vegas, and Florida. And southern California is generally staying the same and slightly going up but prices are dramatically going up.

                                                My point is not to throw a bunch of statistics at you but everybody needs a place to live and as a land investor specifically because you have so much control about pricing and buying and selling and you do not need to go do a site review on every deal. You can capitalize on that.

                                                Jill and I just retained a buyer who we’ve had a personal relationship with for a lot of years. Our kids are the same age and they’re purchasing infill lots all over the place … purchasing infill lots all over Phoenix and they’ve just put their order in with us and we’re negotiating a bunch of deals right now as their partner. So, they saw an opportunity in a market that’s screaming hot and we’re helping them work it out. These are really bright people that for whatever reason have not figured out …

Jill DeWitt:                          Isn’t that funny?

Jack Butala:                         How to send out a …

Jill DeWitt:                          I mean, why is that Jack?

Jack Butala:                         I don’t know.

Jill DeWitt:                          Okay, hold on a moment

Jack Butala:                         These are like crazy bright people.

Jill DeWitt:                          This is like we just went through this recently when we were in Scottsdale last week. We met with so many flippers that they’re just having trouble finding the assets. And they haven’t figured it out. So like you just said, that’s what’s so beautiful is we got that front end one nailed, man. Nobody does it better than you do. That’s a fact. And you have me to answer the phone, so there you go.

Jack Butala:                         Right.

Jill DeWitt:                          In theory.

Jack Butala:                         No, it’s not theory.

Jill DeWitt:                          That’s true. It’s often me answering the phone. Depending what it is. It was so funny. I had a member a couple weeks ago, I can’t remember who it was and it was so funny because I’m like, “This is Jill.” And he was like, “Jill, Jill?” And I’m like, “Yeah”. And he’s like, “Why are you answering the phone?” And I’m like, “Because everybody else is on the phone.”

Jack Butala:                         Did that really happen?

Jill DeWitt:                          Yeah. I’m like, “You got me.” So it was really kind of funny. So you might just get me on the phone. Anyway, I lost my point there.

Jack Butala:                         I’ll save you.

Jill DeWitt:                          Thank you.

Jack Butala:                         My point is, take a look at these statistics. Really spend some time on the internet and find out where the population growth is in our country and send out some offers. That’s what we do all the time. One or two campaigns in an urban, not a rural campaign, but one or two urban campaigns, somebody’s going to pick up the phone and say look, I’ve got this letter and I’m not necessarily interested in selling this property at all but I’ll tell you, it seems like you sent out about 5,000 of these things. Whatever comes back, I’m happy to work with you.

Jill DeWitt:                          Like you want to buy them.

Jack Butala:                         You can find some buyers.

Jill DeWitt:                          Yeah, that’s what I mean. That’s true. Or even just work it backwards like you said. It’s too easy. We’ve proven this, to go find these buyers. They’re all over the place. And then, if you’re really uncomfortable, let’s just say, finding the asset, not knowing if people are going to want it. Well, that’s easy. Go get five, ten buyers and figure out what they want, and only mail just for that.

Jack Butala:                         Just for them.

Jill DeWitt:                          That’s it.

Jack Butala:                         That could be your whole career.

Jill DeWitt:                          Yeah. And talk about no guessing. No guessing, take all the worry out of it.

Jack Butala:                         It doesn’t require any money.

Jill DeWitt:                          And I’ll tell you right now. This is what I learned especially in the Scottsdale, Phoenix, and metropolitan area right now, every single flipper’s walking around saying, we’re hurting for inventory. It’s the best problem.

Jack Butala:                         Landlords, so a lot of people in the industry that we’re in are not good landlords. And Jill and I, I include Jill and I in that. But there are some people who have figured it out and if they have more than 100 units, they’re always looking for more. I just throw out 100 as an arbitrary number. So you can really easily find by looking at data who the landlord is in any given zip code because their company’s in an LLC. Or it’s XYZ LLC 1, XYZ LLC 2. And if you send letters and say … tell them what you’re doing. I’m telling you, you’re going to get a lot of calls back saying tell me how I can work with you? You have nothing to lose. So you throw them a few deals and you see what happens. But you will sell it.

Jill DeWitt:                          Can I share … This is not a plug but we haven’t talked about it in a while. We give a lot of advice but I want everybody to know that we have the solutions too. If you’re listening to us and you really want to … well, this is all theory. I’m not advocating … Don’t do this the hard way everybody. Don’t now go call a county and try to do this backwards because I’m telling you it doesn’t work. That’s the long way and the hard way and the expensive way and the stupid way. Get the right data and I mean, just you can look us up or check out Offers 2 Owners and just test it if you want. It’s offers and the number two, and then owners.com.

Jack Butala:                         You know what? This is a good time … We don’t do this enough.

Jill DeWitt:                          We don’t.

Jack Butala:                         Jill and I own a company called the Jack Jill Family of Companies. And we provide all the solutions. This is not a commercial. We provide all the solutions for this. We own a company called Offers 2 Owners where we’re a bulk mail company. We’re probably the cheapest and best service in the industry for specifically what we’re doing.

Jill DeWitt:                          I didn’t mean to interrupt you, Jack. But we can pull the data too.

Jack Butala:                         Yeah.

Jill DeWitt:                          So you don’t have to get a monthly thing. You don’t have to bite the bullet with Core Logic or something like that. We can help with all that.

Jack Butala:                         We also own a company called Land Academy where we teach you exactly how to buy and sell land and where to sell it every single step of the way. And we own a company called House Academy. This is 35,000 foot overview which we have not ruled out yet but it does the same thing that Land Academy does for houses.

Jill DeWitt:                          Exactly.

Jack Butala:                         There’s a lot of other … If you go to jackjill.com, we own several other tools to make this possible for anybody.

Jill DeWitt:                          So we’re here telling you on the show the big theory and the picture and how to do it and answering questions. But if you really, really want to do it, we can solve it all for you.

Jack Butala:                         Exactly. Well said.

Jill DeWitt:                          Thank you, Jack.

Jack Butala:                         Well, you’ve done it again. You’ve spent about 15 minutes with us listening to the Jack Jill Show. Join us tomorrow where we discuss how the price of everything goes up. The price of real estate is crazy but wages stay the same. So in light of what we just talked about, it’s all about how you can monopolize on it, capitalize on it, as a real estate investor.

Jill DeWitt:                          And we answer your question, should you have one. Post it on our online community and it can be found from jackjill.com. Go there. It’s free.

Jack Butala:                         You are not alone in your real estate ambitions. Doesn’t it feel weird to plug our own stuff?

Jill DeWitt:                          I don’t think we are. You know, what’s so funny is I just realized shucks, we keep talking about this and I feel like there’s a lot of people going okay, that makes sense. I need to do this. It makes sense. And I’m like, we didn’t even really share with them. By the way, we can help you. And whatever, however much you want to do or as little you want to do or something. You want to test the concept for yourself which I highly recommend. Or even just talk to people that are doing it right now. Do that too. Go talk to other people. We’ve been doing it for years but it’s so helpful when you talk to others too that maybe they’re six months into it. Because we’re how many years into it. For you, Jack, I’m not going to date …

Jack Butala:                         It doesn’t matter. It’s the early ’90s.

Jill DeWitt:                          Yeah, we’ll just say that. I won’t throw out the age number but this is so yeah. But anyway, it’s fun talking to other people that … because that’s what’s important. If it were me, Jack, and I was just now finding myself thinking about this, I’d be like wait a minute. Well, that’s great, Jack. You guys have been doing it since the ’90s

Jack Butala:                         Congratulations.

Jill DeWitt:                          Sure, it’s easy for you.

Jack Butala:                         Congratulations guys, that’s good.

Jill DeWitt:                          Yeah, great. I don’t want to take 20 years or 30 years to catch up to you so how do I do it. All right. Well, go talk to some people that we showed how to do it and see where they are. And then you can go, all right. That’s what I can expect at six months of this and all that good stuff.

Jack Butala:                         You know, I read an article recently about people in their … like 34 and under in age. And they loath advertising. They think it’s useless. They think it’s an insult. They just can’t stand any part of it and they won’t partake in anything that has to do … where it’s even involved. Unlike us where we just grew up with it. We had three channels. Three television channels and a few radio stations. And NPR was the only place you could really listen to anything that was commercial free. But now there’s so many choices that they just completely avoid it. Like this podcast is commercial free except for the banter we just had about our own stuff. So that’s why I hesitate to drop all of our dot coms.

Jill DeWitt:                          I don’t see it that way, Jack. We’re just saying it … If we had uber commercials loaded in here, that would be one thing but we don’t.

Jack Butala:                         Yeah, you’re probably right.

Jill DeWitt:                          Thank you.

Jack Butala:                         I guess this is different.

Jill DeWitt:                          Hey, share the fun by subscribing in iTunes or wherever you are listening and while you’re at it, please rate us there. We are Jack and Jill.

Jack Butala:                         We are Jack and Jill. Information …

Jill DeWitt:                          … and inspiration …

Jack Butala:                         … To buy undervalued property.

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