Chasing False Due Diligence (LA 1731) RERUN

Transcript:

Jack Butala:

Steve and Jill here.

Jill DeWit:

Hi.

Jack Butala:

Welcome to the Land Academy Show, entertaining land investment talk. I'm Steven Jack Butala.

Jill DeWit:

I'm Jill DeWit, broadcasting from sunny Southern California.

Jack Butala:

Today, Jill and I talk about chasing false due diligence. And right at the end of the show yesterday, I asked Jill to tell us a story about how this episode came about. Can you please repeat it?

Jill DeWit:

Yes. So we have a new member in Land Academy. First deal came in, they loved it, submitted to me for deal funding. I looked at it, I didn't love it. Specially-

Jack Butala:

Loved the asset, not the price.

Jill DeWit:

Not the price. It's like, I wasn't in love with it. And don't be afraid to do this. I just sent an email out yesterday, by the way, to a seller. They got our offer in the mail. Instead of calling, they decided to email me and I said, "All right." And she's like, "Hey, it's my grandma's property. We like the offer," dah, dah, dah. And I had to write her back and said, "Look, I like it. I don't love it. So my original price is going to be the end price." So, that's where we are.

Jack Butala:

The old grandmother's property story.

Jill DeWit:

It is? No, and I believe her. I'm sure it's true.

Jack Butala:

Yeah. Me, too. It's hard to get a really great price out of your grandmother. You just don't want to do that.

Jill DeWit:

I know. I'm not even sure of the original price I loved. So what I wrote back was, "I like it. I like it. I don't love it." I said, "The best I would do and the highest offer is my original offer. Let me know what you guys think," and then walk away. So you have to get to that point, so, where we are.

Jill DeWit:

So back to what you asked me about this person. They're trying to make this deal happen and they've submitted it a couple times and I keep saying, "Shucks." Originally, I said I would, I think their offer was 30. And I said, "You know what? I'd give them five," kind of thing. That would the best I would do. And then they wrote back, and they're like, "But Jill," and then I said, "I marked it canceled." Not going to happen because 30 and five are very different.

Jill DeWit:

So then they came back and said, "But we found these other comps and we feel really good about it." And I looked at the comps and I said, "Well, maybe 10." And then I kept reading. I said, " [inaudible 00:02:17], I would consider 10,000." And they said, "Well, we got them down to 20,000. They won't go below that." I said, "Well, then the deal's done. As far as I'm concerned done. They're either going to accept 10,000, really I like five or that's it. I'm not going to come up to their 20,000."

Jill DeWit:

And the thing is, and what this episode is about is going to be more about how to not get into this predicament of trying to chase a deal and why it happens.

Jack Butala:

Yeah. And again, I have, like I said, yesterday, I have like 10 questions for you because I have personal experience with this. When I started, I had issues with pricing and not necessarily pricing a mailer, but just pricing like in letting go of a deal. And I think there's a lot of reasons and they're all the reasons that I couldn't let go of deals were all in my head. And I still find myself doing it on big, high price, personal investments for us. And we'll talk about it. 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:

Douglas, it looks like, who is new to the group not yet a member wrote, "Recently, my partner and I were contacted by a Land Academy lender."

Jack Butala:

What is that? I put this in here for a reason.

Jill DeWit:

We don't have Land Academy lenders.

Jack Butala:

I couldn't agree more.

Jill DeWit:

I'm very curious. I hope somebody said who's Land Academy lender. That's really funny.

Jack Butala: