3 Ways to Value Real Estate (LA 802)

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 am Jill DeWit. And we are again broadcasting from sunny Southern California.

Steven Butala:                   Today Jill and I talk about the three ways to value real estate. I'm surprised we haven't talked about this earlier.

Jill DeWit:                            I know.

Steven Butala:                   This is show 801. And we haven't talked about valuation. It's so important, you know?

Jill DeWit:                            I agree.

Steven Butala:                   We'll get to the meat of it, I guess in a minute. Before that let's take an interesting question actually from one of our star performing members, Luke Smith.

Jill DeWit:                            Cool.

Steven Butala:                   If I can get everything to work.

Jill DeWit:                            It's okay.

Steven Butala:                   Yeah, alright.

Jill DeWit:                            By the way, where did he post this question? On our free online community and you can find it on LandInvestors.com.

Luke asks, "I'm okay at selling the smaller dollar amount properties, selling usually a couple a day. Now I want to get good at selling the bigger dollar ones."

Steven Butala:                   Yeah.

Jill DeWit:                            "My buyer pool is not the right people to buy my bigger dollar ones. I think the right people are people already bought one or many in the area. Maybe even a couple county area buyers who paid and researched the market before buying in the area already."

Steven Butala:                   What he's saying is he's finding buyers who've already gone through the motions of researching the area so he doesn't have to hard sell them on the area. They're already sold on the are, they just to buy cheap properties from him.

Jill DeWit:                            Right. They bought large acreage over here, they bought large [crosstalk 00:01:30] over here.

Steven Butala:                   And he's totally right.

Jill DeWit:                            Exactly.

Steven Butala:                   There's a reason he's good at making so much dough.

Jill DeWit:                            "They already know what the area's value is. There might be some developers in that list too."

Steven Butala:                   Exactly.

Jill DeWit:                            "I want to mail them and pitch them." So here's the question, "What is the 80/20 or the Pareto principle to hit them? What price? What time limit? What type of properties? What size? The same type recent buyers for lots of money, right? Or are people who paid less more astute shoppers and more willing to jump on a new deal? If I have a five acre and they just bought a point two five acre, you think they're prone to go for my five acre one?"

Steven Butala:                   Yes. I do.

Jill DeWit:                            "Is two years enough? Or five years of recent buyers enough?"

Steven Butala:                   Yes.

Jill DeWit:                            "Lots of things to test out here. Still cheaper than hiring out picks or drone or realtors or much of the other kinds of advertising like LandWatch, et cetera."

Steven Butala:                   Like LandWatch. He's exactly right. Let's summarize.