One Deal Leads to Ten Leads to One Hundred (CFFL 584)
One Deal Leads to Ten Leads to One Hundred (CFFL 584)
Transcript:
Jack Butala: Jack and Jill here.
Jill DeWit: Hi.
Jack Butala: Welcome to the show. In this episode, Jill and I talk about how one deal leads to 10 and leads to 100. Before we get into it though let’s take a question posted by one of our members on the landinvestors.com online community It’s Free.
Jill DeWit: Okay. Chris asks, “I’ve been receiving calls from some letters I mailed three or more years ago seeing if someone to purchase their property. I was wondering how to handle these type of offers. Do you still make an offer? Do I ask has anyone else reached out to them? Or do I pass because it took them this long to get back to me, and will take them even longer to make a choice to sell?
Jack Butala: This question …
Jill DeWit: I like these.
Jack Butala: Was designed for Jill DeWit.
Jill DeWit: I know.
Jack Butala: Because we would deal with this daily.
Jill DeWit: Oh, totally. I love these calls.
Jack Butala: The whole staff does, but, yeah, go ahead.
Jill DeWit: So, you know what this means to me, Chris, number one you send out a good offer
Jack Butala: Yeah.
Jill DeWit: Because, you know what, they loved it and they hung onto it.
Jack Butala: But this whole thing falls under congratulations, you rock.
Jill DeWit: Yeah. You did it right. Didn’t sing to them then, but they said you know what, they obviously liked your offer that long ago that it wasn’t trash worthy. Seriously. It hung out in the file. They stuck it in their file and hung onto it.
Jack Butala: They took you seriously.
Jill DeWit: Yeah, for a rainy day.
Jack Butala: It wasn’t a four-color bleed postcard that to it may concern or current resident.
Jill DeWit: So, now they are calling you back, and the first thing, which I love these calls. Every time this happens we have some … 10, 12, 15 years ago, it’s so funny. And the first thing is, “Oh my gosh you guys are still there.” It’s funny because there’s a phone number and I’m gonna call it, and you know that they’re surprised that somebody is still around. Yeah. What do you have? And we’ll get the information, and then you know what? If it meets my criteria I’m still gonna buy it. Now the truth for us is the properties that I was purchasing 15 years ago and the transactions I’m doing today are often … they are usually very different.
I’m really not interested in a one, two, three, four, five thousand dollar property. A $100,000 property I am but doesn’t mean I don’t talk to these people too. I wanna get that information and I’m always gonna ask them too what else they have because what if this person, even though I sent them an offer on one, they own half of the mobile home park? I uncover that. Now it meets my criteria and I still might act on it.
Jack Butala: It’s always worth a talk is what Jill’s saying and I agree.
Jill DeWit: Yep, and they know too by the way … and I don’t see it as any sign that they are gonna take six years or six months to pull the trigger at this point. Honestly, Chris, I don’t care. So, here’s a conversation I would do if I were you. Yes, I’m still here. What do you have? And then this is your opportunity for you to go, “In that area, the properties are kinda worth this so I would pay x.” And they are either gonna say yes right now or they’re gonna think about it, or they’re gonna say no. One of those things is gonna happen. Probably gonna be yes or they’re gonna think about it because they are now serious about it in reaching out to you. They’re not just calling you because they’re now going through their mail and they call everybody who sends them a letter. No, they are obviously interested in selling. That’s your thing to decide, and then I move on.
I don’t chase people. I don’t really do a lot of calling. I don’t go, “Hey. I made an offer with you a week ago. Are you gonna take it? Are you gonna take it?” No way. I make them an offer and I move on because I got too many other people to deal with. They’re in or they’re out.
Jack Butala: So, let’s dig into this a little bit deeper. Why now after all these years are they calling you back?
Jill DeWit: What changed?
Jack Butala: What triggered that phone call? What do you think, Jill?
Jill DeWit: Number one is someone passed on.
Jack Butala: Death.
Jill DeWit: Somebody else is getting this mail. Might be the wife. It’s might be the kids. It might be the husband who knows whatever.
Jack Butala: On a scale of one to ten in your experience … You are really qualified to answer these questions. How motivated … Now it’s a few years later, on a scale of one to ten what’s the motivation level of selling this property?
Jill DeWit: Eight or a nine.
Jack Butala: Me too. I agree. It’s really, really high. So, what that all adds up to in my opinion is …
Jill DeWit: Opportunity.
Jack Butala: Price adjustment.
Jill DeWit: Yep. This is your opportunity. There’s a reason why. I remember this one so well for some reason because we talked … she shared everything. She needed the money because her dog was dying. I’m not kidding.
Jack Butala: It’s always a circumstance like that.
Jill DeWit: She needed money for vet bills.
Jack Butala: If you can get too …
Jill DeWit: And she was very clear about that and I was really happy … I was happy with the transaction. She was happy with the transaction.
Jack Butala: The faster you can shift their focus off the real estate … because they don’t care about the real estate. What’s on their mind is some circumstance that Jill just noted.
Jill DeWit: Something has come up.
Jack Butala: Somebody passed away and they are working through the estate, and this is just a line at them in their list. Oh yeah, if you’re really gonna buy it I don’t care what the price is.
Jill DeWit: I just want to get rid of it.
Jack Butala: I just need to check it off my list.
Jill DeWit: Right.
Jack Butala: Or my dog-
Jill DeWit: Or there’s something going on that they need the money.
Jack Butala: So, if you get them … especially in houses, this is true. If you get them comfortable talking to you … and Jill’s a wizard at this … comfortable talking to you about whatever circumstance then the price is now the secondary issue. I’m not say take advantage of anyone ever. I’m not saying that at all. I’m just saying there’s an opportunity to buy an asset probably cheaper, and if it doesn’t matter to the person at all then that’s what you should do.
Jill DeWit: Mm-hmm (affirmative). Exactly. That’s good. I’m trying to-
Jack Butala: I said this a million times and it’s worth saying it again. What we’re looking for is not a piece of real estate. What we’re looking for is circumstance, and if you talk to anybody who sends letters out they’ll tell you immediately, “Oh yeah. You’re right.” It’s always a circumstance that leads somebody to sell their property, the assets and stuff. Don’t spend as much time on the actual piece of real estate. Spend more time as an amateur psychologist and you’re gonna do great, on the buy side anyway. Sell side, totally different. It’s all about the asset.
Jill DeWit: Mm-hmm (affirmative). Exactly.
Jack Butala: If you have a question, or you want to be on the show reach out to either one of us on landinvestors.com. Today’s topic how one deal leads to ten deals leads to a hundred and beyond. And for us, it’s like 16,000 almost now.
Jill DeWit: Careful what you wish for.
Jack Butala: This is the meat of the show. I’ve said … Earlier this week I used that whole cleaning out the closet analogy. I’ll say it again real quickly. Recently I went to look for an old fishing pole and I went into the closet and it was just a disaster in there. So, what did I do? I cleaned out the closet so this never happens again. And that application of solving a problem carries into everything in companies. You don’t just look for the fishing pole and reach back through there, all the garbage, and pull it out balancing on your tip toe and pull the thing out so you can use it. You solve the problem so that it doesn’t get lost ever again. You solve the missing fishing pole problem. So, that’s what how you get from one deal to ten deals to a hundred to a thousand.
You get that first deal under your belt and you’re gonna know at that point whether this is something that you want to do, which is why Jill and I used to give away property. To kinda get …
Jill DeWit: To get it going.
Jack Butala: Yeah, just to see.
Jill DeWit: Get you excited about it. Have something to sell and work on and all that good stuff.
Jack Butala: Maybe you like to kiss girls. Maybe you like to kiss boys. Try it out. We don’t know.
Jill DeWit: What does that have to do with any of this?
Jack Butala: Whichever one you like stick with it.
Jill DeWit: Oh, boy. Somebody is getting punchy. Oh, boy.
Jack Butala: This is the ninth show we just recorded. Anyway, so, one deal. And once you get that one deal done either you’re into it or you’re not. Get to 10 deals, and if you have what it takes to get to 10 deals you have the cleaning out the closet mentality. Where you’re not just getting that next deal down. It’s not just hand and mouth. You’re putting together a system to get multiple deals done at once. And now your learning which types of deals are better, houses or land. Which state’s better. Which county. That’s how you’re gonna get to 10 deals, and then that times 10 gets you to 100. Go ahead, Jill.
Jill DeWit: Thank you.
Jack Butala: She just raised her hand like she’s in a class.
Jill DeWit: I did. Thank you, Mr. Butala.
Jack Butala: I like that a little bit.
Jill DeWit: Yeah. So, here’s the deal. Deal number one is all about getting over your fears. Getting that one deal under your belt. I can’t many tell you how many times I’ve talked to people who have been listening to us and often they’ve come from other environments and they’ve been trying and trying and trying for six, eight months, even a year. I’m like, “Alright. Do you have a deal?” Nope. I’m like, “What the heck?” Gotta get that one deal out. Get it under your belt. I don’t know why our members-
Jack Butala: This is so foreign to me.
Jill DeWit: For some reason maybe it’s people that I talk to. I’m working on this now. Honestly, Jack, we have enough year, and times, and history under our belts, and members, I’m gonna really find out on a percentage-wise … I think it’s high. I think it’s high, but I could be misthinking. The way we spell things out, and we’re here holding hands and we’re here accessible my interpretation is I have more people that are hitting their first deal and getting it out of the way.
Jack Butala: Is that how they see it? Let’s just get it out of the way. That’s how I see it.
Jill DeWit: I think the first deal’s scary. Yes. So, deal number one is get that out of the way, you got one done. I mean when I say done all the way through bought and sold.
Jack Butala: I call it cash in, cash out. You got the money back in your account.
Jill DeWit: Mm-hmm (affirmative). Or cash out, cash in.
Jack Butala: Yeah. Yeah. That’s it. That’s it.
Jill DeWit: Thank you. So, then … now you get that one deal out of the way. Got that done. Okay, I can do this. Now I want you to do 10 deals. Why? Because you’re gonna make some mistakes. You’re still learning out the kinks, and by the time you are on your 10th sale, you’re like, “You know what? I think I got this. Alright. I know that that works and now I need to do this. Then I typically have it recorded. Then I typically do this.”
Jack Butala: Why didn’t you say it was this easy. That’s what I heard.
Jill DeWit: You think so. Okay. I think people … They are just over their fears, and they understand the process more. Now, going from 10 to 100 I think is fun.
Jack Butala: Yeah, and profitable.
Jill DeWit: Uh-huh. And you start to look at things differently. By deal one … You scrutinized everything on deal number one. It’s like kid number one. Seriously. But we do. We all do things differently on kid number … This is true. Kid number one the world stops at nap time. We all do things differently. A pacifier hits the floor and they get a brand new one. By kid number 10 you’re like, “Yeah, whatever.”
Jack Butala: Kid number 10, Jill?
Jill DeWit: Kid number 10 eats gravel for dinner regularly because their hot dog fell on the ground and that’s just the way it is, but you know what I mean? So …
Jack Butala: I just got a chill.
Jill DeWit: But seriously-
Jack Butala: I don’t want 10 kids.
Jill DeWit: You do things differently like, “Oh, I got this. I know how this is gonna go. I know that cry.” Now on a hundred you’re like, “Oh, this is good. Game on.
Jack Butala: You don’t get from 10 to 100 unless you have a system to clean the closet out. You don’t do 100-
Jill DeWit: Clean the closet out.
Jack Butala: One-offs. You have a system where the mail goes out and you’re planning. You can set your calendar by the calls are gonna come in this week. Then next week it’s gonna be a little quiet. Then the week after that the mail’s all gonna come back signed.
Jill DeWit: Right.
Jack Butala: Two weeks after that we’re gonna do deal, and then you really start systematizing everything.
Jill DeWit: Right.
Jack Butala: People call it automation but I don’t like that. Automation has this lack of responsibility to it. You press the machine and it starts and you walk away and go to bed. It’s systematizing it.
Jill DeWit: Yeah. Well, I see it like … We’ve talked about this before. Think of yourself as a franchise. Think about setting yourself up as a franchise and getting things into a routine and a system that somebody else can do it. You can recreate the system somewhere else.
Jack Butala: Yeah, eventually you don’t have to work there.
Jill DeWit: That could be or at least you’re only doing the important parts that only you can do.
Jack Butala: Right.
Jill DeWit: And that’s the thing you and I talk about often, being the deal maker. You should be doing that.
Jack Butala: And pricing.
Jill DeWit: Doing the pricing. Picking the county and working with the data. There are some things you should not outsource because the risk of mistakes is too high. But putting it into mail merge and getting the mail out that’s nothing you should be doing. Handwriting letters, heck no. Sorry, I almost started to say that. Answering every single phone call you don’t need to be doing that if you wanna do that, but the initial wave of calls you don’t need to bad calls.
Jack Butala: You need to learn.
Jill DeWit: Yeah, you do in the beginning. You teach somebody to do that and then they weed out the good calls and those are the ones that you follow up on. Those are the stuff you should be doing.
Jack Butala: If you can do one deal-
Jill DeWit: Ordering the notary, you definitely shouldn’t be doing that.
Jack Butala: No. You shouldn’t really close your deals anymore after a certain point. You should have somebody else do it. We’re lucky in this business because you can say, “Alright, it costs $500 bucks to close a deal front and back. I’m just gonna buy more expensive property then and pay for that so I don’t have to do it anymore.” That’s what I’m saying about between deal 10 and 100 you’re working these things out. You’re making these decisions and you’re saying, “Yeah, it turns out I really don’t like to negotiate deals” or “Yeah, it turns out I really am a data person and I love that, so I’m gonna get a partner.” Like I did. I got you to handle some of the people part of this business. It’s substantial. And then after 100, you turn into us where it becomes thousands and thousands of deals.
Jill DeWit: And too bad for you. You turn into us.
Jack Butala: Then you have a failing radio show.
Jill DeWit: Jack. At least you didn’t say something else.
Jack Butala: What did you think I was gonna say.
Jill DeWit: I don’t know.
Jack Butala: A failed relationship?
Jill DeWit: That’s what I thought.
Jack Butala: Oh, Jill. Sweetheart. That’s silly. Now you’re getting punchy giddy.
Jill DeWit: I am getting punchy. You are right. That’s so funny.
Jack Butala: Join us in the next episode where we discuss how Jack/Jill prepare for the economic downturb. It’s inevitable. It’s not the most fun conversation, but it will come at some point. Not too soon, but it’ll be here.
Jill DeWit: It’ll be here and you there’s things you can do to prepare and make it work for you by the way.
Jack Butala: That’s right.
Jill DeWit: And we answer Billy’s question about a seller wants a sale but he’s making him wait a few months. What’s that all about?
Jack Butala: What the heck?
Jill DeWit: I don’t know.
Jack Butala: I can’t wait to hear that.
You are not alone in your real estate ambition. Good show.
Jill DeWit: It was good. For some people, that’s a big number. 100 is a big number.
Jack Butala: For some people, that’s the life number of deals.
Jill DeWit: Yeah.
Jack Butala: Let’s say you did 100 deals and you made $100,000 each deal. Oh, it’s a math test today. Thanks, Jack. I love doing math.
Jill DeWit: But what if your deals are apartment buildings? That’s nothing to sneeze at.
Jack Butala: What if it’s in Southern California, and you mark up every house you buy 100 grand?
Jill DeWit: That’s nothing to sneeze at. Are you doing math right now? You can’t do it in your head, Jack?
Jack Butala: I could.
Jill DeWit: What’s 100 times 100?
Jack Butala: 100,000 times 100.
Jill DeWit: 100,000 times 100 is billion?
Jack Butala: You can’t do math. It’s $10 million.
Jill DeWit: 10 million, sorry. I’m so excited with the billion number. It’s really silly though. But you know what? A million’s not … Here’s the thing-
Jack Butala: It’s 10 million.
Jill DeWit: I know. A million’s not …
Jack Butala: A million is going to get you nowhere quite honestly.
Jill DeWit: That’s what I’m trying to say in a nice way. Number one a million was a really big number.
Jack Butala: No, it’s never been a big number for me.
Jill DeWit: Well, it was for me. Well, I’m talking about when I was a kid. Wow. They’re a millionaire. How cool is that? And now you go, “Eh, okay.”
Jack Butala: I skip right over the top of that.
Jill DeWit: I know. Exactly.
Jack Butala: But if you do plan well and you have no debt with $10 million bucks in the bank you are done.
Jill DeWit: Oh, that’s good.
Jack Butala: With a lot less actually. The key is not paying a mortgage and stuff. That’s a topic for a much different time. $10 million is still easily enough money to live on for the rest of your life.
Jill DeWit: You could. I agree. I agree. Hey, like our show? Please subscribe and rate us on iTunes or wherever you are listening.
Jack Butala: Information and inspiration to buy undervalued property …
If you enjoyed the podcast, please review it in iTunes . Reviews are incredibly important for rankings on iTunes. My staff and I read each and every one.
If you have any questions or comments, please feel free to email me directly at jack@LandAcademy.com.
I would like to think it’s entertaining and informative and in the end profitable.
And finally, don’t forget to subscribe to the show on iTunes.
