Millionaire - What to Expect (CFFL 565)

Transcript:

Jack Butala:                         Jack and Jill here.

Jill DeWit:                            Hey.

Jack Butala:                         Welcome to the show. In this episode, Jill and I talk about being a millionaire and what to expect. I don't know from personal experience, but we'll talk about it.

Jill DeWit:                            Like, what?

Jack Butala:                         Before we get into it, let's take a question posted by one of our members on our LandInvestors.com online community. It's free.

Jill DeWit:                            Okay. Farren asks, "We're completing our first option deal and the bank got involved on the lender's end." Uh oh. "They're a teeny bit concerned that they're making a check out to a company that does not technically own the land. Any advice to settle the nerves in the small town bank? How would you go about handling this?"

Jack Butala:                         Yeah, this came up on our weekly call, I think, right?

Jill DeWit:                            I think it did.

Jack Butala:                         I answered it like this. Why is there a bank ... We don't ever deal with lenders, I mean ever, unless they're, like, a private person.

Jill DeWit:                            Right.

Jack Butala:                         So I'm not sure ... What do you think, Jill? I don't know how a bank ever-

Jill DeWit:                            I'm trying to piece it together. Option deal is: I'm not putting down the money; I'm optioning the property. So I'm guessing it's a pass-through from the buyer ... you think? The buyer through Farren? The buyer's getting the money? Or Farren's getting the bank money?

Jack Butala:                         Sometimes we say run to the bank and do this deal, it's so good. Sometimes we say turn around and run in the other direction as fast as you can from this deal. That's my advice here.

Jill DeWit:                            This is true. If you're doing an option deal and you need to have a lender involved, pass on the deal. Is that what you're saying, Jack?

Jack Butala:                         Our whole business model, right from the time that you send the mail out, the blind, unsolicited offers in the mail, we scrub the data out so there's no lenders. So lenders really, really complicate and destroy real estate success in my opinion.

Jill DeWit:                            Yep. Here's one of the reasons why.

Jack Butala:                         Not 100% of the time. Leverage can be good, but if you're relatively new at this or, you know ... It's just not a good idea.

Jill DeWit:                            Yeah.

Jack Butala:                         Go ahead, Jill.

Jill DeWit:                            Well, I mean like you said, this is one of the reasons why lenders can mess up deals. I'm not sure about ... I'm still trying to wrap my head around exactly what's going on. I wonder if Farren's borrowing the money in the middle just to close the deal.

Jack Butala:                         Yeah. Something. We don't know, I guess.

Jill DeWit:                            Right, and sort of double-end closing it.

Jack Butala:                         Let me tell you something about lenders really quickly with my experience and how I got to be this jaded.

Jill DeWit:                            Oh no. Please share, Jack. I want to know how you got to be this jaded in life.

Jack Butala:                         Talking to Bank of America, let's say. I'm not picking on Bank of America. Any bank. Any big bank, right?

Jill DeWit:                            Oh, please pick on them. Have at it.

Jack Butala:                         And you say, "You know what, I need a mortgage on my house," or, "I have a mortgage, but I need a new one," or any of that stuff. And they say, "Oh my gosh, great." Just like walking into a used car dealership,