Urban Land vs Rural Land (LA 1322)
Urban Land vs Rural Land (LA 1322)
Transcript:
Steven Butala:
Steven and Jill here.
Jill DeWit:
Hey.
Steven Butala:
Welcome to the land Academy show. Entertaining land investment talk. I’m Steven Jack, Butala
Jill DeWit:
And I’m Jill Dewitt broadcasting from sunny Southern California.
Steven Butala:
Today, Jill and I talk about urban land versus rural land.
Jill DeWit:
I know what I like.
Steven Butala:
I know what I like.
Jill DeWit:
Oh, I wonder if it’s the same.
Steven Butala:
I bet it is.
Jill DeWit:
You want to do it? Now or in a minute?
Steven Butala:
One word answer?
Jill DeWit:
Uh huh.
Steven Butala:
Go ahead.
Jill DeWit:
Okay. I’m going to count down three, two, one, and then we say the word. Okay. Three, two, one. [crosstalk 00:00:31]. What? That wasn’t even on here.
Steven Butala:
I don’t care if it’s urban or rural, if it’s priced good and it’s got access, I’m buying it.
Jill DeWit:
Oh, you tricked me.
Steven Butala:
Well, it’s not a trick and I don’t trick you.
Jill DeWit:
I got to say most, most urban land will have access.
Steven Butala:
What I’ve noticed with Land Academy members is they pick one or the other and we don’t. We have multiple deals in our database that we’re either buying or selling in some process of that. And all of them have two or three of the same characteristics, urban, rural don’t care. Grossly under priced is one characteristic, complete and full blown physical and legal access is another criteria and an environment where we know we can sell it fast. Those are the three things.
Jill DeWit:
Makes sense. Well, I guess we’re done with the show.
Steven Butala:
There’s some huge, huge differences between urban and rural land. And that’s really what this show is about.
Jill DeWit:
Right.
Steven Butala:
It’s not about, you just brought it up like, “See, you interpreted this.” Which one would you like to buy, urban land versus rural land?
Jill DeWit:
Yep.
Steven Butala:
And I saw this as urban lands, very different than rural land and you should buy both.
Jill DeWit:
Well, I’m on the same page. I’ll share that in a moment. After these words from our sponsors.
Steven Butala:
Who’s our sponsors by the way?
Jill DeWit:
Brought to you by neighbor scoop, get the scoop on your neighbors. It sounds like neighbor scoop could be next door, but it’s not. That’s not like the next door app. You and our world used neighbor scoop, you’re probably not next door.
Steven Butala:
If I could go back in time, I would’ve just called this land or diligence. That’s what it is. We’re going for pre COVID hair salons and stuff. And that’s just not who we are.
Jill DeWit:
That’s true.
Steven Butala:
So I’m not going to change the name again, but that’s what it’s called.
Jill DeWit:
I know. That’s true.
Steven Butala:
Before we get into it, let’s take a question posted by one of our members on the landinvestors.com online community. It’s free.
Jill DeWit:
Tim wrote, “Hi from Seattle. Wife and I are preparing for our first mailer.” Sounds like, my wife and I are preparing for our first child. That’s cute.
Steven Butala:
Mailers, easier.
Jill DeWit:
True. “We realized there are some States here that are no solicitation, but it doesn’t seem that applies to out of state owners. Has anyone had experience with this? If not, I will try to contact an attorney and then post the outcome of the conversation. Thanks in advance.” Well, that’s pretty cool.
Steven Butala:
Timmy nailed it.
Jill DeWit:
Yeah.
Steven Butala:
What he’s talking about is this, there’s a handful of States and I’ll try to list them here, the ones that I know about anyway, that have rules, they pass laws, just like the phone, you have the federal do not contact. You can put your phone number in and people aren’t supposed to, they do anyway, but they’re not supposed to contact you with unsolicited stuff. You don’t have to do this to not receive texts. It’s an eight, but with a bulk mail with mail, send away. It’s just like that. That’s just the environment we’re in. A few States took action and said, “We don’t want to be a part of that.” And pass a bill where, I don’t know if it’s illegal, but they don’t disclose the data. So make it really hard to get good data to make a mailer.
One’s Idaho, one’s Kansas. One is South Carolina. And I think Illinois, like in the last two months passed it. So is this the big thing of the future? No, I really doubt it. Can you mail out of state landowners or homeowners or real estate owners? Because you can see their siters address in the data. And then siters addresses is the actual physical location. And mostly, not mostly, but most of the time the siter’s state, let’s say it’s Idaho, the person who owns it lives in Idaho too, might be adjacent, might be across the state, whatever. A lot of times it’s a completely different state. And what Tim’s asking is this completely different state owner, is it okay to mail them? And the answer is yes.
Jill DeWit:
Thank you. I concur.
Steven Butala:
Urban land versus rural land, this is why you’re listening. I’ve had people ask me on that topic just to wrap it up.
Jill DeWit:
The last thing?
Steven Butala:
Yeah, “The world’s over. The world’s over, every state’s going to pass that. Never going to be able to send offers out again.”
Jill DeWit:
Not funny. Oh, mails going away.
Steven Butala:
Stuff like that’s happened to me and guess what? We’re still here, still sending blind offers a different way. Still making it work.
Jill DeWit:
I’m not afraid.
Steven Butala:
Neither am I.
Jill DeWit:
Thank you. So, you want me to go first this time?
Steven Butala:
Yeah.
Jill DeWit:
Okay.
Steven Butala:
I kind of let the cat out of the bag in the beginning on this topic.
Jill DeWit:
Well, here are my thoughts on urban versus rural. So I saw this topic the way I weighed the words in the topic was, this is just going to be an open discussion about what’s different about urban and rural land. So for me, it comes down to kind of three things. One is money. One is size. I find characteristics, because their characteristics, they’re not, it’s obviously not 100%, but some things [inaudible 00:06:07]. And then zoning. So traditionally when I’m working with urban land, so closer into the city, that’s really kind of the difference versus way out in the country, rural. I find that often a characteristic is they’re more expensive because it’s next to a gas station or it’s next to a mall or it’s next to a million dollar house or whatever it is. I find that size is I find a characteristic. You can chew this all up if you want.
Steven Butala:
No, actually your perception on this is really, it’s not the same perception or take that I had on it. So it’s goodness, go ahead. At the end, I’ll have some stuff to say.
Jill DeWit:
Okay. Size, it’s going to be really hard to find a 40 acre property downtown versus 20 miles that way. And then zoning. Zoning, you’re going to have a lot, seems like you have a lot more choices. Obviously we’re going to have the commercial area, we have a residential zoning. We may have some agriculture or whatever it is. A lot of this of course carries out into rural areas too. But it seems like most of the time I’m going to find commercial in an urban area. Not as often going to find commercial out in a rural area. So, that’s number one. I want to add too how I feel about these. What is my choice? Do I like urban? Do I like rural? I like them both. I love rural because it’s just so darn easy.
I just love it. I like acreage. I like landscape. I like trees. I like that better than… And maybe just the most awesome, amazing half acre infill lot on the planet that we just took down because this guy was going to build there and then he passed on and the family finally got it done with probate and yeah, it’s a great situation. It’s worth so much money. Okay, that’s awesome. Slash Robert’s not as dreamy to me, so that’s the thing. But I do them both, I see the value of both and I see the value of having a varied portfolio. I think it’s important, when you talk to sellers, they call you back. I always tell everybody, “Ask them, what else do you have?” You never know, because I have uncovered some gems that way because of, “I didn’t think you’d be interested, but I happen to own this piece of property next to the cert mall. Are you flipping kidding me? It’s paved on a major thoroughfare. Yeah, I’m absolutely interested.” They’re like, “Huh, I didn’t know. I thought you only wanted the ranch property.” “No, I like it all.”
Steven Butala:
We bought property adjacent to Walmart like that two years ago.
Jill DeWit:
There you go. That kind of a thing. But what I do want to say, that’s a positive for me. I like having varied portfolio, it’s a good thing. Be careful though. Then I have one negative and then I’m going to hand it back to you. My negative and my only caution is, stay away from something shiny syndrome.
Steven Butala:
That’s good advice actually.
Jill DeWit:
Yeah. Watch that. I would seriously write this on a sticky note, put it on your monitor and glance at it often, something shiny syndrome. It’s a real thing. I like this, SSS, I’m going to go with this. S cubed anyway.
Steven Butala:
S cubed.
Jill DeWit:
S cubed. Something shiny syndrome is getting all excited and all hung up on a property that’s too far out of your niche. I want you to be careful like, I’m buying a golf course. I’m buying an Island. I’m buying whatever, dream it up, a Marina. Do you really want to do that? We had a gentleman, I just turned down a deal, by the time this airs will be like 10 days ago, someone confidentially in our group emailed me what could be a good deal. It was in Florida. It was 34 acres in a subdivision.
I’m like, “Is there a flood issue? What’s going on with this?” And I pulled it up and I’m looking, I’m like, no flood issue, it’s paved. It really is, when you first glance, a great opportunity and a great price. So now I’m dropping everything and doing this here and getting into it and I’m looking around and I’m picking up on, it’s like somebody just subdivided this area and then a variety of different builders came in. Our homes came in, some other different people come in and they do that. You might have Richmond American over here and Lamar over here and whoever were there.
Steven Butala:
They have my attention.
Jill DeWit:
Okay, yeah.
Steven Butala:
Go ahead.
Jill DeWit:
Okay. So I can see, “Okay, these builders isolated these things within this all big community, the subdivision.” I’m like, “Why did they skip over this piece?” And I’m digging and digging, trying to figure out why. Come to find out, it was a couple emails back and forth. And the whole point was when whoever did the whole, with the city planned this out, they had a cap on how many homes can be built, it was like 368. And they were at the cap. This particular piece of dirt, which is a beautiful piece of land was deemed open space.
Steven Butala:
What’s the use of it at all?
Jill DeWit:
Open space, none.
Steven Butala:
Never.
Jill DeWit:
Not never. So I had to deal a bit. And so the person who brought me the deal said, “Well, here’s the scoop. I talked to somebody at the County, there’s a 50, 50 chance you could get them to rewrite everything, allow more homes in this area and rezone it.”
Steven Butala:
No there’s not. There’s not a 50, 50 chance.
Jill DeWit:
50, 50 for me is like stupid. Even 99 one.
Steven Butala:
I can go to Vegas and get those odds.
Jill DeWit:
Exactly.
Steven Butala:
Even 99 to one, I wouldn’t take.
Jill DeWit:
Exactly, because there’s a chance I can’t do it. And I’m not going to buy it rolling the dice like that. And that’s huge.
Steven Butala:
What’s the use? Is there any use?
Jill DeWit:
Rezoning is often time consuming, difficult, expensive, and not worth it.
Steven Butala:
I’m going to edit that sentence, rezoning for how we operate in this group, you can just call it impossible. Okay.
Jill DeWit:
Okay. We’re on the same page.
Steven Butala:
If you’re at Shea Holmes, rezoning farmland in a place that typically gets rezoned and you have an office building full of people who are entitlement experts, it’s very likely that it’s going to go in your favor.
Jill DeWit:
Yeah. And you’ve got five years to do this, you don’t care.
Steven Butala:
And it does take five years. That’s not the business for it.
Jill DeWit:
Exactly. Right.
Steven Butala:
So how much was this [inaudible 00:13:13], was it 40?
Jill DeWit:
No. Yeah well, it was 32 or something like that.
Steven Butala:
32 with the easements. Did you know that 40 acres with easements around is 32 acres?
Jill DeWit:
Oh, okay. Thank you. All right. So it was a hundred thousand dollars. It was 100% correct. The person said, “This could be worth millions.”
Steven Butala:
Did you offer 10?
Jill DeWit:
No, no, no. Not even going to do… Why, I can’t do anything with it?
Steven Butala:
Just sell it as open land. There’s nothing you can do?
Jill DeWit:
Nothing you can do with it, it’s not worth it.
Steven Butala:
Can you go sit on it?
Jill DeWit:
No, there’s nothing you can do with it. Follow me here, you’re going down something shiny syndrome. Sorry, S cubed, I’m calling S cubed. But I don’t mean to pick on you.
Steven Butala:
No, I don’t see it that way.
Jill DeWit:
It wasn’t worth it.
Steven Butala:
I saw the deal come in.
Jill DeWit:
Yeah, I didn’t share with you the email because they emailed us both. It’s kind of on my side of the sheet right now and I appreciate you letting me handle it. So I just had a conversation without involving you and you don’t need to be in the email back and forth. And so when I got that back, I quickly emailed and I said, “Now I see the problem. I hope you also see, these red flags are huge.”
Steven Butala:
All right. So I have a bunch of a bunch of questions
Jill DeWit:
It’s not worth my time anymore at this point. It’s not worth a hundred thousand dollars. I’m not going to gamble and try to get this rezoned and wait a year, if I’m lucky for all of this. It could go wrong and I very nicely said, “This is why I open the next envelope and…
Steven Butala:
How did this property originally come across your acquisition environment?
Jill DeWit:
It was just an email.
Steven Butala:
Okay, stop right there.
Jill DeWit:
Mm-hmm (affirmative).
Steven Butala:
Please, everybody listen to me. We have spent 25 years creating what I think is the perfect mechanism.
Jill DeWit:
Oh that’s not how we found the property.
Steven Butala:
Did it come from a mailer?
Jill DeWit:
Yeah it came from a mailer.
Steven Butala:
Our mailer?
Jill DeWit:
No. Oh I’m sorry, it was…
Steven Butala:
Hold on a second Jill, I know you’re excited. Without question, if you get a deal in that’s not from your own mailer.
Jill DeWit:
It was. Oh from me, right. I know what you’re saying.
Steven Butala:
We sit down and target places, very methodically, Jill and I through talking to people and figuring out where we want to buy property. So we’re in control of it. And so you’re exactly right. It is shiny stuff.
Jill DeWit:
Yeah.
Steven Butala:
When you get a deal that’s outside of that environment, when somebody calls you or a broker calls you that is not directly from a mailer that you sent, be aware.
Jill DeWit:
Well, just be careful. That’s my whole something shiny syndrome. That’s the bottom line. Again, you’re asking these questions, you find out what else they own. For me, this is not something that I don’t do normally, because I do deal funding for people, for property types in areas that I’m not targeting right now, all over the country. So that’s how this was presented to me like, “Hey, I need the money. You got to see this. This could be fantastic for both of us.” And he was right. It’s just again, for the reason I already described, not going to go down that path. And that’s what I told him.
Steven Butala:
So here’s the thing about urban land and back to this topic, urban land versus rural land, the motivation for each of those seller types is verbatim exactly the same. They just want to get rid of it. They might be different types, not that the motivation is the same. The types of sellers might be different. A rural land tends to be mom and pop, or if there’s some event, a family event and the urban land may be an older guy who owns a company, who’s just kind of done. And it’s the last 10 pieces of property that he’s ever had in his life. And it’s just over. So in both cases, you still want to talk to the seller and get the sense that, “I just want to get rid of this, price is not really my main factor.”
So that’s super important. The thing about urban land is that someone’s going to use it. The person who buys it is going to drive there, they’re going to look at it before they sign the check. And then they’re going to say, “I’m putting a house up and putting a condo complex up. It passes all my tests.” Last year Jill and I did a property zone for a motel. And the person who bought it is putting up a motel right now. Rural land, not so much. You’re kind of selling that little house in the Prairie dream. So you have to look at, before you pull the trigger on buying these two types of properties or target them in a mailer, you have to consider, who’s going to buy it from you?
And it’s a very, very different marketing situation. You’re selling a dream with rural land and you’re selling use for urban land. So that’s a pretty material difference. If you’re brand new, actually the process of buying a piece of urban land versus rural land is exactly the same. There may be some tiny little city municipality caveats that go on with buying urban land, but usually no. I say do both.
Jill DeWit:
I do too. That’s my thing. Happy you could join us today. Five days a week, you can find us right here on the Land Academy Show.
Steven Butala:
Throughout the episode on the Land Academy Show is called Land Academy member, Jason Mayfield in his interview with Jill and I. You are not alone in your real estate ambition.
Jill DeWit:
I was thinking about that property. We closed on that motel property, I think it was December. Yeah. November, December, and then COVID hit.
Steven Butala:
I know.
Jill DeWit:
And it just dawned on me, if that person is still on path building that motel, it’s like wow.
Steven Butala:
I feel fortunate.
Jill DeWit:
I do too.
Steven Butala:
Because I haven’t always been on that side of the economy.
Jill DeWit:
Yeah.
Steven Butala:
I’m usually on the other side.
Jill DeWit:
Yeah.
Steven Butala:
I’m stuck with all this property and the thing crashed or I’m in the middle of a construction project and the COVID happened.
Jill DeWit:
Well, the good news is, Amazon was building a massive place down the street.
Steven Butala:
Yeah.
Jill DeWit:
So that could be people that would, I’m sure that’s what they’re thinking too, who would use the motel coming into the facility, check things out, who knows whatever?
Steven Butala:
Plus the area of the country, they don’t stop for stuff like this where that is.
Jill DeWit:
Yeah.
Steven Butala:
It’s not like California.
Jill DeWit:
It’s amazing. I’m going to go look it up, fingers crossed they’re okay.
Steven Butala:
No construction has stopped.
Jill DeWit:
I want everybody to be okay.
Steven Butala:
I have not seen a halted construction project.
Jill DeWit:
It’s true.
Steven Butala:
Certainly not where we live.
Jill DeWit:
That’s true.
Steven Butala:
Just driving down the street. So, I hope so too.
Jill DeWit:
Yeah. Thank you for tuning in. We hope you find our content valuable and we really appreciate your support. If you haven’t already, please check out our YouTube channel and hit the subscribe button,
Steven Butala:
Your comments and suggestions help us create the type of content you’re here for. Hitting a like button on your favorite episodes helps to support our channels algorithm, engage your interest for future shows. And you know, me, it’s all about getting that data. We’re Steve and Jill information…
Jill DeWit:
Wait, and inspiration
Steven Butala:
To buy undervalued property.
Jill DeWit:
How funny.
—————————————-
If you have any questions or comments, please feel free to email me directly at steven@BuWit.com.
The BuWit Family of Companies include:
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 Apple Podcasts.
