This is episode number 2144. In this episode, we’re going to break down the 8 A’s of due diligence and what matters about each of them. There’s been some confusion about it. I know this because on a Thursday call, which Jill and I do weekly, we do what we call Would You Do This Deal? Land Academy members bring us deals and we immediately, as you’ll see here in a minute in the question, review them in the order of the 8 A’s and see how many are there and how many are missing. If there are 2 or 3 missing, we start to get concerned.

Steven started with four As when I came on board. They were the things that we had to check before we could buy a property. Those were the most important things to look at when you were doing your due diligence. It has expanded to 8 A’s and we’ll go through them in great detail, which is cool. If you’re brand-new, you’re starting out, and you’re a new investor, you want all the As. You want to be able to say yes to all of them and you’ll see why in a minute here.

It’s a way to gauge the properties that you have on your potential acquisition list in a uniform format.

Due diligence is a way to gauge properties you have on your potential acquisition list and not make a mistake. Share on X

To not make a mistake.

Ask us how this came about because we’ve failed at this for a lot of years. All week, Jill and I are talking about motivation and confidence. We want you to stay motivated and build some confidence in the decisions that you’re making in your real estate world. On Monday, we already said we’re going to break down the 8 A’s for you. On Tuesday, we’ll talk about why sellers choose to sell land below market value, which is a pretty popular question.

Discord Question: Evaluating A Mobile Home Deal With Smart Pricing

On Wednesday, we’ll talk about the most common mistakes new land investors make. On Thursday, we’ll talk about how to stay motivated when you’re not seeing the results yet. Finally, on Friday, we’ll talk about how to transition from the side hustle to full-time land investing. That’s one of my favorite topics because you’re having success. Each day on the show, we answer a question from our Land Academy member Discord forum and take a long, deep dive into land-related topics by popular requests.

Our question is from Chris and Chris. Chris 1 and Chris 2 are members of Land Academy. They put in a deal. I’m going to give you the lowdown on the deal and then we’re going to see what their question is here. This call came back from a mailer. This is February 2025. It is in Florida. The seller is asking $90,000. It’s a total of 1.1 acres with a mobile home on it. It is a regular deed in Hernando County. We’re good with that. Here’s what they did, though. They’re trying to analyze and gauge the value of it. They gave the stats here for all the different estimates for smart pricing.

It’s what Jill and I call smart pricing in O2O, Offers2Owners, which is the mailing company Jill and I started a long time ago. We added a product called SPS, Smart Pricing Service, where you take a look at the actual asset. In this case, it’s a mobile home with its own piece of land. You look at all the algorithms around the internet and they did that. Go ahead, Jill.

They put the numbers in here for us. Here’s what they said. “Zillow priced this asset at $157,200. The realtor prices it at $220,000. Trulia prices it at $161, 900. Redfin prices it at $213,000.” Remember, the seller wants $90,000. The average of those 4 algorithms divided by 4 comes up to $188,025. It’s 1.1 acres with a mobile home. Here are some more of the As as we’re going along here.

That’s why I put this in here.

One is Alive. The owner’s deceased but his wife’s alive. They know they need to confirm who’s on the deed.

Alive is one of the As. We’ll go into great detail on this after the question. I thought it was appropriate to look at a real deal before we explain it. Alive means the person that you’re speaking with on the phone needs to be the person that’s on the deed. They can’t be the air in a will. It gets very difficult if the people who are on the deed are not alive.

Another A is Attributes. It is close to a couple of nice country clubs and about 50 minutes to Tampa. There is Access. It is Affordable, although we do need a second opinion. It is Adjacent to a lot of properties around there and near our SFRs and mobile homes. This fits right in. Another A is Afraid. “I don’t have experience doing an evaluation of land with a mobile on it so I am nervous,” is what one of the Chris’ said. Another A is Abundant. They followed up with this. They said, “Offers are out but the response is slow in this area. I am not sure yet how the mailer is going to go.”

Knowing this without looking up the property, there’s an 80% chance I would buy it. It’s half the price of what the internet from an algorithm standpoint believes that it’s worth.

If you screw it all up and make $50,000, are you okay? I’m okay.

I wouldn’t even say screw it up. Price it that way. Buy it for $90,000 and sell it for $140,000. It’s worth $190,000.

It’s going to fly off the shelf.

Breaking Down The 8 A’s Of Due Diligence

That’s the Land Academy model. Our topic is breaking down the 8 A’s of due diligence and what matters. This is the meat of the show. We ran through an exact example of the 8 A’s in a real-time, real-world example of how you want to implement judging or evaluating an acquisition candidate that you have. Here are the descriptions in the order of ChatGPT. I looked this up. It has a cute little description of us. They made us sound nice and easy to listen to. I noticed these AI products dumb everything down. It’s fine. There’s no humor in it either.

The first A, in no particular order, is Affordable, ensuring the property is priced right and within budget. That’s a cute little way of saying, “Is it cheap enough or not?” Affordable is my way of saying, “Is it so freaking cheap that you got to buy it?” You have to have that feeling like, “I can’t pass this acquisition up.” It’s a lot like Chris and Chris’ deal there. It is half the price of the algorithm price. Number two is Access. Go ahead, Jill.

Checking to see if the property has legal and physical access. Those are two different things. Is it legal access, a road, platted, and all of that recorded? Also, can I get there? It’s very easy to have one and not the other in both directions.

Adjacent is what’s surrounding the property. There’s a very good chance that whatever’s surrounding it, and I mean immediately which is why we call it Adjacent, that’s how your target property’s going to be utilized. If there’s a mobile home next to it and you’ve got a piece of property that’s zoned for a mobile home, that’s how it’s going to be used. It makes your evaluation process from a pricing standpoint and all that easy. It’s like, “What’s going on next door? Does it make sense for me to buy this at, hopefully, 20% of what’s going on next door or less?”

Acreage is evaluating the size of the property. What that means is did I get the acreage I was going for? Does it work for the neighborhood and work for what I’m trying to do here?

Larger is usually better but not all the time. Would you rather have a small usable property on the ocean or 80 acres in the middle of the desert? You have to use some relativity and some common sense judgment about the size of the property, whether it fits in and is usable, and its surroundings. Attributes are what’s cool about it. Does it have a stream running through it? Is it close to the Grand Canyon? Is it close to Las Vegas?

Is there a mobile on it?

There’s a short list of things that everybody wants when they have a little daydream. When they’re sitting in their terrible job and having a daydream about moving out to the country, is it fulfilling that? It’s going to make it a lot easier to sell if it has a bunch of attributes.

Alive is, are the owners on the deed alive and able to sign? That’s the gist of it. Your life will be much easier if the answer is yes.

There are a lot of ways around it, and each state is different about this. Depending on how much money you think you’re going to make on the piece of land, you might be willing or not willing to jump through the legal hoops to get it conveyed. These last two As are the newest. They have nothing to do with the actual assessment of the real estate but the assessment of you as the investor.

Abundance is, are you looking at a lot of deals? If you’re looking at twenty deals because you sent a ton of mail out, you’re not going to put yourself in a position to make a bad decision. If you’ve sent 300 letters out and you’re looking at 1 property, you’re going to try to make that work. You have no abundance there. Looking at one acquisition is a very bad idea. Looking at 20 and choosing the best out of that 20 is a very good idea. That’s Abundance.

Looking at one property acquisition is a very bad idea. Looking at 20 and choosing the best out of those is a very good idea. Share on X

Afraid is, are there some red flags? Is there something that’s tripping your radar that’s causing you to second guess this acquisition? That’s important.

Next Topic: Why Sellers Choose Below-Market Land Sales

When you look at a deal for the first 30 seconds, you’re going to come away with a feeling of, “I got to stop what I’m doing and buy this property. This is an amazing deal.” It’s a gut check. Maybe you’re going to say, “I’m not sure about this,” or, “They accepted my offer of $46,000, but at $12,000, I wouldn’t be afraid at all. At $12,000, I’d feel great about this deal.” You don’t want to ever be afraid. Join us in the next episode as we discuss why sellers choose to sell land below market value. We are information and inspiration to buy undervalued property.