Land Investment Opportunity Zip Code by Zip Code (LA 758)
Transcript:
Steven Butala: Steve and Jill here.
Jill DeWit: Hello.
Steven Butala: Welcome to the Land Academy Show, entertaining land investment talk. I'm Steven Jack Butala-
Jill DeWit: And I'm Jill DeWit, broadcasting from beautiful San Francisco, California.
Steven Butala: Today, Jill and I talk about land investment opportunity zip code by zip code. Hey, it's like Fourth of July today, right?
Jill DeWit: Fourth of July, I was just going to say Yay! Happy Fourth of July. I wonder how many people are listening because no one's going to work today.
Steven Butala: Yeah, so either a lot of people are listening, or they have better stuff to do,
Jill DeWit: Exactly. Maybe they're all listening around the barbecue to this show right now with a beer in their hand-
Steven Butala: That'd be good.
Jill DeWit: ... and a red, white, and blue hat.
Steven Butala: Maybe they're on the land that they bought-
Jill DeWit: Celebrating.
Steven Butala: ... cooking hot dogs with that-
Jill DeWit: I'd love it.
Steven Butala: ... worn-out baseball hat, and just a hat full of happiness because they saved half price on the property they have.
Jill DeWit: I think that's awesome.
Steven Butala: I do, too. Before I paint a different picture like that, let's take a question posted by one of our members on the landacademy.com online community. It's free.
Jill DeWit: Nat asks, "Hi, guys. I have a deal that I'm about to pull the trigger on, but it's a step out of my traditional purchase criteria. I bought all small info lots up until now, about 20 total.
Steven Butala: Good for you.
Jill DeWit: This one is $10,000 for 10 acres and without physical access. I did make a three to four minute video so you can see, to make it easy for you. If you don't mind watching it and letting me know if it's an issue, or if you think that it's fine, and if you have any advice on final due diligence that I should complete before proceeding." He put in here, this is so great, the video link so everyone on that thread could look at the video and look at the property and all that good stuff.
Steven Butala: I've watched it, and Jill hasn't, and that's okay.
Jill DeWit: Do you want me to keep reading?
Steven Butala: Yes, absolutely.
Jill DeWit: Okay.
Steven Butala: I'll talk about it at the end.
Jill DeWit: Okay. Now it goes on to say, "Here are some side questions that I have. The seller says it's behind a locked gate, so I don't know if I'll be able to get a photographer in there before we open escrow. Does that concern anyone? I think it's fine, but I'd like photos before it's closed, or at least before it's listed. What other due diligence would you do? I plan to double-check what the deal is with the wells in the area, septic in the area, and zoning. Taxes are okay, and I'm closing with title. Thanks, Matt."
Steven Butala: All right, Matt, I watched the video, and I think it's a fantastic property in a fantastic county, in California I think it is. I think that, in a different situation, it could be a multi-million dollar property. I think it's got some elevation issues that you probably can get around. It looks to me like it's got legal access, but not physical access because of this gate situation. I'm not going to give you just an absolutely you shouldn't do it, or absolutely you should do it. I think that, and you're actually pretty experienced at this, we know Matt, he actually lives pretty close to us,-
Jill DeWit: I thought that's who that was, yes.
Steven Butala: ... and you sound like you're already going to buy it. I think it's worth probably two, three hundred thousand dollars, if you can just resolve this gate issue, or you can let the new guy do it who you're gonna sell it to. If you're buying it for 10 grand, the guy who controls the gate might just pay you 25 thousand bucks for it and just be done with it.
Jill DeWit: That's true.
Steven Butala: I don't know. But, where Jill and I are in our career, I honestly think I would probably pass this deal on to somebody in our group and just walk away. If we have to do anything, other than subdivide property which is really what this show is gonna be about, not subdivide but parcel split, if we don't have to do it ... I don't know.
Jill DeWit: It's a tough one.
Steven Butala: Am I lazy? Is it lazy? What is it?
Jill DeWit: You are-
Steven Butala: Am I old?
Jill DeWit: Maybe. You're getting a little set in your ways, babe.
Steven Butala: Would you do this deal?
Jill DeWit: You know what, this is a conversation that you and I had recently about this. I'm like, hold on, hold on, hold on, remember the number of crazy home runs that have come our way, that were a little bit out of our comfort zone, but we didn't want to turn down the deal. I'm not necessarily against those. What a great video, as we're scanning here. Matt put in all his Google Earth stuff. He put in a plat map to show where the roads are, the parcel, all that good stuff. So, it's not crazy. I kind of like it.
Steven Butala: I know. I knew you were gonna like it.
Jill DeWit: Gosh, you know what, for 10 thousand bucks, I'd do that deal.
Steven Butala: I know. Would you?
Jill DeWit: Yeah. What are the comps? I already forgot what he said, the comps in the area, did he ... I'm sure they're in this video.
Steven Butala: Yeah, I mean if all else fails, you could do videos for a living. Actually, I think that's what he does.
Jill DeWit: I don't think it's crazy. My point is sometimes it's okay. Don't get too far out of your comfort zone, especially because this is not, he's not brand-new. He's done 20 deals. So let's say on deal two, I'd maybe not get so excited about this.
Steven Butala: Yeah, true, right.
Jill DeWit: Deal 20, 40, 50, deal 100, everything's a smooth running machine with all your other stuff. You're like, hey, you know what, I'm gonna take on this deal. It's not what I normally do, but I'm gonna learn this process because I might do more of these some day.
Steven Butala: Exactly.
Jill DeWit: For that reasons, I would do a deal like this.
Steven Butala: Yeah, and I think that you're gonna need a drone with this level of property. This could be a home run. He's buying it for 10, 10 acres for 10 grand, in just pretty much a-
Jill DeWit: Awesome area.
Steven Butala: ... picture perfect area.
Jill DeWit: Exactly, so there's a locked gate.
Steven Butala: It could be a $100,000 property.
Jill DeWit: By the way, just because the seller says it's behind a locked gate, doesn't necessarily mean that's true. There's a lot of things you can't assume. You have to check them out. I'm okay with that. Maybe it's a quick little bolt-cutter situation.
Steven Butala: You know what, whenever there's bolt shunning, I'm the one standing there. Jill's somewhere off in a different county usually.
Jill DeWit: We've had these conversations. Maybe you're dragging ... remember that whole dragging a railroad tie? There's your access road.
Steven Butala: You know, for this kind of property, too, what I was gonna say is you've got to pull the stops out on the marketing. You're gonna need your own shots and all that. Actually, going out there with a drone, having somebody go out there with a drone, even if-
Jill DeWit: That's gonna get over the gate-
Steven Butala: ... behind the gate-
Jill DeWit: ... and then figure it all out.
Steven Butala: Yeah, that would give you a lot of really good information.
Jill DeWit: I agree, totally agree.
Steven Butala: Do the deal, I guess.
Jill DeWit: Yeah.
Steven Butala: Today's topic, land investment opportunity zip code by zip code. This is the meat of the show. So yesterday, I was talking about this deal that Jill and I are doing right now. It's a piece of property. We sent out a mailer to buy houses in a really urban area, which we successfully do every single week, and we found out this property's on an acre, which we can, without even changing zoning, get it to parcel split so there's three total properties. So, we're going to make several hundred thousand dollars on this deal without doing any work.
Oh my God, Steve, you just said you shouldn't have to do anything to a property when you sell it. That's how you roll. Well, I'd be crazy not to fill out some papers to make a hundred thousand dollars more. That's just crazy, so that's what we're doing. This is the kind of thing, this all happened because I brought data, I scrubbed the data down to the local zip code, and then, even further than that, used some census track pricing logic.
Jill DeWit: Mm-hmm (affirmative).
Steven Butala: So, it's one thing to send an offer to every property owner in one county, lets say for every five acre property owner in one county, and shotgun approach that way. It's another thing, when you get to the next level, to really look at zip code by zip code, how properties are priced. Even then, sometimes you have to go down further,-
Jill DeWit: You do.
Steven Butala: ... but I'm telling you, it's a step in the right direction. The further down you go locally to price property ... Pricing mail, you live and die by that as a land investor.
Jill DeWit: You really have to dig into it. I was just thinking about some of this property that we were looking at recently in northern part of Arizona. You think it's all cabin property. No, it's not. There's lake cabin property. There's golf course cabin property. There's next to a road or highway cabin property, not just road, a highway.
Steven Butala: Yep, exactly.
Jill DeWit: So, this is the kind of stuff that I wanted to talk about on the show. They could be in the same zip code. You gotta really, like you just said, drill down there and get into it. That's why I know that a lot of people, when you say census tracks, first, they don't know what that is, and then to get in that detail, it takes some time. But, like you just said, Steven, the more you do it and get in there, you'll see it. You can pull the numbers and go, wow, this whole pocket, now I know all the homes right around the lake here, I've gotta add 10 thousand, check. By doing that, your results will be better.
Steven Butala: That's right, higher yield.
Jill DeWit: You'll get more positive results. Then, as you go out from the lake, okay that's great. Now, you're gonna find another little pocket over here, like, wow, these people happen to all be on a golf course. All the homes facing the golf course, I can see their numbers. Look at all the comps, and I'm not just saying homes, I'm just saying pieces of dirt. A lot of these are just property that it's just coming, and there you go. Closer to a town, further away from a town, there's so many things that you need to look at when you're doing your pricing, and it all gives you better results,
Steven Butala: Right, and the place to start, by what Jill's talking about, is by zip code, not by county. The counties are too big. By zip code, really get in there. I don't want you to have analysis paralysis. You do have to, at some point say, you know what, it's not perfect but it's going in the mail today because that's my deadline. But, the zip code is the way to start.
Here's an example. 85251 and 85258 are both Scottsdale. You know those zip codes really well.
Jill DeWit: I do.
Steven Butala: Can you even imagine how different those pricings are?
Jill DeWit: Very different.
Steven Butala: 85251 is old town-
Jill DeWit: Probably a couple of hundred thousand dollar price difference.
Steven Butala: In old town, 85251, and then 85258 is like the middle, center, getting kind of expensive.
Jill DeWit: Exactly.
Steven Butala: 85253 is the most expensive zip code-
Jill DeWit: I was just gonna say, yep.
Steven Butala: ... in Arizona, and they all touch each other. You really, really, really have to, not on your first mailer, but you have to understand that with every mailer you have to get down further, closer to the ground.
Jill DeWit: I love it. I think, really, what we're doing here is just making you aware of what you need to be thinking about and the reasons why, and encourage you to spend the time to do it right.
Steven Butala: Yep.
Jill DeWit: Even though we have mail down as cheap as possible, I don't want to waste my mail. I don't want to waste my time, my energy. Even if I'm not answering the phone, I don't want my staff answering the phone. What if I'm paying for Pat live, I don't want to pay for an extra hundred phone calls that didn't need to happen and the mail that went out just to get those phone calls. That's expensive.
Steven Butala: Yeah, exactly.
Jill DeWit: The reason you're doing this here is to hopefully do as little work as possible, spend a little more time on the front, get good offers out there for only the real solid people calling you back, and then you do those deals.
Steven Butala: Yep, perfect Jill. You nailed it. But, you can't expect to do that the first time out of the box.
Jill DeWit: That's true.
Steven Butala: You can't expect to send three or four hundred letters out and buy a house or a great info lot, like Matt's got here. That's just not how it works. You do have to at least plan for 1500 units.
Jill DeWit: Oh gosh, yes.
Steven Butala: We send out 80,000 letters. That's just where we are right now. So, get to know the zip codes. It's gonna pay off huge. That's my whole point here.
Jill DeWit: It really will.
Steven Butala: Well, you've done it again. You've spent another 15 minutes or so listening to the Land Academy Show. Join us tomorrow for another interesting episode where we discuss professional land acquisitions, a step-by-step approach.
Jill DeWit: I'm looking forward to that.
Steven Butala: Yeah.
Jill DeWit: Tomorrow's another good day, too.
Steven Butala: I was just hoping you were just gonna talk.
Jill DeWit: Well, I don't know. Tomorrow's my birthday. We'll see how it goes.
Steven Butala: What? Oh, you just slid that in there, didn't you?
Jill DeWit: I did slide that in there, and we answer your questions posted on landinvestors.com. It is our online community and it is free.
Steven Butala: You are not alone in your real estate ambition.
Jill DeWit: All right, Fourth of July, you got the barbecue? You ready?
Steven Butala: Yeah.
Jill DeWit: Can we go now? Can I go now?
Steven Butala: I know you've loved the Fourth of July ever since I've known you.
Jill DeWit: Is it fired up? I wish I could crack a beer right here, so someone could hear it.
Steven Butala: What is it about this holiday that you love so much, other than that it's the day before your birthday?
Jill DeWit: It's the summertime. I love the summer. I love the beach. I love the sand. I love the fireworks.
Steven Butala: Oh, fireworks, sure.
Jill DeWit: You know what, everyone is celebrating. It is so much fun, and we're gonna have a blast tonight. I am so excited.
Steven Butala: I love your enthusiasm, Jill.
Jill DeWit: Thank you. Share the fun by subscribing on iTunes at wherever you are listening, and while you're at it, please rate us there. We are Steve and Jill.
Steven Butala: We are Steve and Jill, information-
Jill DeWit: And inspiration-
Steven Butala: ... to buy undervalued property.
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