How Much Capital Do I Need to be an Equity Partner?

Transcript: 

Jill DeWit:                            Jill DeWit with Jack Butala! That's where you say hello.

Jack Butala:                         Hello.

Jill DeWit:                            Welcome to our show. We flipped it and Jack's like, "I don't know what to do." In this episode, Jack and I talk about how much capital you need to be an equity partner. I'm curious what you're going to say here.

Jack Butala:                         I love talking about equity.

Jill DeWit:                            I know. First, let's take a question, posted by one of our members on the LandInvestors.com online community. Right now, aka Success Plant, and it's free.

Jack Butala:                         So Kathleen asks, and this is a really good question, I picked this question out of Success Plant, "In a recent RealQuest search, in which improvement percentage was set to zero", when you set your improvement value to zero, what you're looking at is land, it isn't real estate with no improvements on it, it's land, "I found parcels with definite improvements, McMansion type built improvements. Before downloading the records, I checked a few of the APNs on the counties GIS satellite images." God, Kathleen's come a long way.

Jill DeWit:                            She's so good.

Jack Butala:                         Excellent work. I would do exact same thing. "Satellite images found that many of these parcels had real improvements, not mobile homes, but real brick and mortar, with existing permits in place. You might remove the quote unquote 'SFR', single family residential, under the land-use criteria, I still get records showing some serious improvements: large houses with very large houses, et cetera. It seems that the 0% improvement criteria is not yielding land, only parcels. I checked eight different APNs, and they all had very nice improvements. It may just be this county, but has anyone else run across this same issue? I'm not sure why I'm getting these results." Okay. There's a reason I picked this lengthy, potentially boring ...

Jill DeWit:                            Tell us, Jack.

Jack Butala:                         ... question. Data, and I'm sure, by now, Kathleen has not even spent a dime on this data, she's just doing research to do a download for a potential mailer. The deal is this: RealQuest has an agreement with 3200 counties, and they all have messy data, and they all use different ways. People at RealQuest download the data each month, or more often than that, from the assessor, and they have to work within a very definite structure, a data structure. Picture Excel, with a bunch of columns, and they have to jam data in there, so the problem may be that the data is jammed in the wrong column, which is very, very unusual, or number two, that county really does do things differently. 0% doesn't mean 0%, or they have some cockamamie scheme about how it all works.

Here's my advice: move on to the next county, or try to find the consistency where the land is indicated somehow in their data set, and then use it that way.

Jill DeWit:                            And then you can be the only one that's figured out that county, and that's not a bad thing.

Jack Butala:                         And that's the last thing I was going to say, and Jill's exactly right, so now, you're at a massive competitive advantage, because no one's going to take that extra step. Well, Kathleen always takes 19 extra steps in everything she does, and I mean that as a compliment. No one is going to hit those properties, they're not going to look that hard into it.

Jill DeWit:                            They won't figure it out.

Jack Butala:                         Exactly. My hat's off to you.

Jill DeWit:                            You know, and that's ...

Jack Butala:                         I love these challenges,