Deals Where We Lost Money (LA 774)

Transcript:

Steven Butala:                   Steve and Jill here.

Jill DeWit:                            Hi.

Steven 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.

Steven Butala:                   Today, Jill and I talk about deals where we lost money. Wow, how can we make that interesting?

Jill DeWit:                            Yikes, I did not realize that's what we were talking about until I'm sitting here right now reading that.

Steven Butala:                   I have to say there are not too many, but man, when we do it, we do it.

Jill DeWit:                            Man, if you're going to do it, do it at what you're safe. You're going to make a mistake, do it at 100 miles an hour.

Steven Butala:                   Exactly right. Before we get into the topic though, let's take a question posted by one of our members on the Land Investors online community. It's free.

Jill DeWit:                            Neal asks, "Hi, everyone. I received a purchase agreement in the mail yesterday that was dutifully signed and filled out. But the offer price was crossed out and essentially doubled. It went from $2,250 to $5,000. At what point do you still reach out to the potential seller to discuss this?"

Steven Butala:                   This happens to us, by the way, all the time. It's better than getting nothing at all, I think. Anyway, go ahead.

Jill DeWit:                            "I have no intention of offering more, but it's worth establishing a relationship since it seems he's interested in getting rid of it? The $5,000 is what he paid for the land years ago. Similar parcels have sold for $6,000 and up. But after sitting around for hundreds of days, I personally would price the property at $4,500 to sell quickly. Have others had success reaching out in these instances? Thanks."

Steven Butala:                   Go ahead, Jill.

Jill DeWit:                            Yeah, we've had this and it's comical. It ties in a little bit with our question from yesterday about what do I do when I have to call him back and change the offer price? This kind of changes ... I understand where the guy's coming from.

Steven Butala:                   Me too.

Jill DeWit:                            He thinks it's still worth what he paid for it. And we all think our ... I say this often around the house and around the office, we all think our asset is priceless, but you know what? It's not.

Steven Butala:                   I wasn't five years old and decided to do a mailer. I came up with this mailer concept in the late 90's, early 2000's because it was solving a huge problem for me. Number one, I don't have to go to auctions anymore. I don't have to go to tax auctions any longer. Number two, I don't have to make cold calls. Number three, I don't drive for dollars. I mean all of those things I've done, and they all suck. All of them. Sending letters out was my way of saying ... it solved like six problems for me. It solved negotiation, so I send a letter off take it or leave it. This is the price, I'm making you an offer. It solved scalability for us. So, I can send out 25 million offers, literally, as easily as I can send out 500.

Jill DeWit:                            Right.

Steven Butala:                   It's just data.

Jill DeWit:                            You can't canvas neighborhoods that fast. It's impossible.

Steven Butala:                   So, one of the things that this person ... not the caller ...