Jack Thursday – Should Agricultural Land be Included in Your Mailer (LA 1547)
Jack Thursday – Should Agricultural Land be Included in Your Mailer (LA 1547)
Transcript:
Steven J Butala:
Steve and Jill here.
Jill DeWit:
Hello.
Steven J 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 sizzling Scottsdale, Arizona.
Steven J Butala:
That’s for sure.
Jill DeWit:
Yep.
Steven J Butala:
Today Jill and I talk about … Well, it’s Jack Thursday, and I talk about should agricultural land be included in your mailer.
Steven J 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. Or if you’re already a Land Academy Member, join us on Discord.
Jill DeWit:
“My name is Michelle. I live in Missouri and I am new to land investing. I have done some investing, but still consider myself new to the world of real estate. I have one rental property, and I just bought a property I’m doing some cosmetic fixes on for a nightly rental.”
Jill DeWit:
“I have been interested in land investing and purchasing for a long time, and I’m excited to learn the process and add it to my portfolio. I’m planning on concentrating on land and note investing extensively going forward at this time. I look forward to learning from you all and we’ll hopefully be able to contribute to others in the future. Blessings.” Aww.
Steven J Butala:
I put this in here because this is very frequent, and welcome Michelle. But there’s lots of people that are joining us that have somewhat of a light existing real estate investing background. In her case, she’s got a couple of rentals and she’s seen the light.
Steven J Butala:
If you’ve seen the light in real … Here’s my point. If you’ve seen the light, and I sound like a company here.
Jill DeWit:
Aah. This is it, it’s just sounds a little weird, by the way I was going to … I’m like …
Steven J Butala:
Here’s what I … Let me try it the other way. If you love the idea of making a lot of money but you haven’t seen the light in real estate and [inaudible 00:01:54] just kind of an afterthought, this is not for you.
Jill DeWit:
And we’ll say in general, or our kind?
Steven J Butala:
If you’ve seen the light in real estate-
Jill DeWit:
Okay.
Steven J Butala:
… and maybe you have a rental. Maybe you redid a few houses and you know that’s not for you.
Jill DeWit:
Right.
Steven J Butala:
Or inherited some land and sold it and made some money, and it just, it is now in your soul and won’t go away, Land Academy is for you.
Jill DeWit:
Right.
Steven J Butala:
If that hasn’t happened to you … Or let’s say you’re a data person and you want to capitalize on your understanding of data. And real estate is just the thing that you think might be able to … you want to be able to do that, this is for you.
Jill DeWit:
You know what my favorite is? My favorite is the people that come to us and they’re like, “Oh, that’s boring.” And they go off and do something else. And I’m like, “No, I think I’d like boring.” You know what I mean?
Steven J Butala:
Yeah, and they come back.
Jill DeWit:
You’re like, “How’d that renovation go?” Oh my goodness. They’re like, “I could do with a lot less excitement.” “Yeah, I bet it was exciting when you opened the walls and found that wasn’t it.” They’re like, “I am not set up for that.” So yeah.
Steven J Butala:
Michelle, welcome to the group. You are a perfect candidate to take this all the way to the end.
Jill DeWit:
Yeah.
Steven J Butala:
Today’s topic. Should agricultural land be included in your mailer? This is the meat of the show.
Steven J Butala:
Here’s the deal with agricultural property. Agricultural property is quite possibly the best zoned or used code that you can get in nearly every environment.
Jill DeWit:
Why?
Steven J Butala:
Because the taxes, there’s huge incentives and have been … This whole country was built on agriculture. When the federal government came in and subdivided it all into one mile squares, a section, 640 acres, and started giving it away in some cases or selling it incredibly inexpensively so that people could homestead it and make a life for themselves in the 17 and 1800s, it was all farming or cattle based. And so the taxes, there’s huge tax incentives all the way back to the homestead times.
Steven J Butala:
And now it’s evolved where the freest type of zoning or changes make, come from agricultural land. You can’t take a residential piece of property and make it commercial in almost any case. Unless you’re in certain areas that are really developing, like Phoenix is one of them, and Austin, Texas is one of them. But try to do it in LA County, forget it.
Steven J Butala:
Los Angeles … Los Angeles. Agricultural property also … I don’t want to make light of this, those are huge benefits. The taxes are cheap.
Jill DeWit:
Right.
Steven J Butala:
And how you’re going to use the property or whoever’s going to buy it from you has a huge array of options about how to use it. For example, in a lot of places, it’s really easy to put a mobile home on a piece of agricultural property without changing any zoning. And in a lot of cases, without going through all the permit process. In many, many cases. If it’s zoned residential, there’s all kinds of restrictions to put a mobile home on it.
Steven J Butala:
And they’re all different, every county is different. And if it’s an incorporated in a city it’s different. But it’s not hard to find out, it’s either on the internet or talking to planning and zoning. Here’s my conversation most of the time with the planning and zoning, “Hey, I’d like to put a mobile home out there. It’s a APN this and it’s zoned agriculture.” “Oh my gosh. Yes. Have a nice day.” Versus-
Jill DeWit:
[crosstalk 00:05:23] the followup question when you-
Steven J Butala:
Versus, “Here’s the APN. I’d really like to put a mobile home out there and it’s zoned residential.” “Oh, okay. Here’s what you got to do.” And then a year later nothing’s done.
Jill DeWit:
Is now the right time?
Steven J Butala:
Yeah.
Jill DeWit:
Okay.
Steven J Butala:
I’m [crosstalk 00:05:40] hell of a lot to say, but go ahead.
Jill DeWit:
Why-
Steven J Butala:
Because it’s Jack Thursday.
Jill DeWit:
Oh, that’s true.
Steven J Butala:
It’s not Jill Friday.
Jill DeWit:
Humor me here, just a second. I do have a valid question. Please explain why certain ag land is so flipping expensive. And I think it has to do with what’s being farmed on it.
Steven J Butala:
Right.
Jill DeWit:
Or the soil or the condition.
Steven J Butala:
That’s all correct.
Jill DeWit:
Or something.
Steven J Butala:
All of that’s absolutely correct. That was my next point. So there’s two types of agricultural land out there, whether you’re in Kansas, Arizona, California, or Oregon. There’s property, that’s being farmed or is being used for livestock. And then there’s property that is zoned agriculture, but nothing’s ever happened on it. It’s just, it’s heavily treed or wooded or whatever.
Steven J Butala:
The property that’s being farmed gets priced as a commodity. And the vast majority of the farmland in the country that’s being farmed is owned by not the farmer. They don’t own the land, some company owns it or people like Jill and I own agricultural land. And a farmer pays us a lease every year to use it.
Steven J Butala:
Great arrangement. Taxes are cheap. Great for the farmer, if the farmer’s any good, and it’s great for us. And everybody gets good tax advantages for that, we do and the farm does. So consequently, because of all that and because the federal government has a vested interest in keeping everybody fed-
Jill DeWit:
Hopefully.
Steven J Butala:
… land is priced when it’s being farmed as a commodity. And so I’ve said this before on the show and I’ll say it again. If you go into any farm town, anywhere, in the morning, usually in the morning, real early in the morning, there’s a bunch of people in overalls drinking coffee, talking about what happened to the price of their land last week.
Steven J Butala:
And so the market kind of sets it, which is great for us because we know what the property’s worth. So they’ll sit around and say, “Yeah, it’s up to $3,500 an acre now.” Or in a lot of … Like in California, it’s much, much higher than that. But if you can buy agricultural property for less than that, you have a commodity priced already for you.
Steven J Butala:
So should you ever exclude agricultural property from your mailer? Hell, no. Absolutely. And even if you’re not … You don’t need to specifically price it, just price it like everything else and something may come out of it. It’s very hard to buy agricultural property, I’ll be real straight with you, the way that we do this.
Jill DeWit:
It’s true. So for me to take away is, obviously leave it in there, I don’t have to price it special. But when it comes back to me and the guy says, “Hey, this is being farmed.” I go, “Oh, I didn’t know that.”
Steven J Butala:
It’s not what we’re doing.
Jill DeWit:
“Tell me what’s going on and how much are you asking,” kind of thing. And my light bulb goes off that, “Okay, my $1,255 an acre is not going to apply probably in this situation, but I’m ready for what he has to say.”
Steven J Butala:
Right.
Jill DeWit:
Done, done, and done. Happy you could join us today. Five days a week you can find this right here on the Land Academy Show.
Steven J Butala:
Tomorrow is Jill Friday, and the show is called, “Why my heartfelt land business model has worked for decades.”
Jill DeWit:
It’s actually our business model.
Steven J Butala:
You are not alone in your real estate ambition. Jill is a little more heartfelt than me.
Jill DeWit:
Oh, that’s why you’ve called it that. It’s really ours. One of us may have our patience, one of-
Steven J Butala:
Yeah, that’s absolutely true.
Jill DeWit:
Yeah, I get it. Do you just send out a few thousand offers to property owners like us, check out offers2owners.com. It’s offers, the number two, owners.com. No set up fees, free mail merge, exceptional service, and now included concierge pricing. It’s amazing. Give offers2owners a call today.
Steven J Butala:
We are Steve and Jill.
Jill DeWit:
We are Steve and Jill.
Steven J Butala:
Information-
Jill DeWit:
And inspiration-
Steven J Butala:
To buy undervalued property.
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