Land Academy Members Rowdy & Kyria Baker (CFFL 429)

Jack Butala:                       Jack Butala with Jill DeWit

Jill DeWit:                           Hi

Jack Butala:                       Welcome to our show today. In this episode, we talk with Land Investor Members, Rowdy and Kyria Baker.

Jill DeWit:                           Yay

Jack Butala:                       Before we get into it. Sometimes I do that cause I just want to see what you are going to do.

Jill DeWit:                           I just waited, like one one-thousand, two one-thousand [crosstalk 00:00:21]

Jack Butala:                       Before we get into the interview, let's take a question posted by one of our members on landinvestors.com online community. It's free.

Jill DeWit:                           Okay. Kathleen asks, I've seen this before NPV. Okay, my non-accounting brains says, what the heck is this and how is it calculated? I get the basics. It's the difference between the cash-in flow and a cash-out flows. But how can I apply this? This is so good. When pricing parcels for terms deals? All right, so somebody already weighed in here. Scott. Todd.

Jack Butala:                       Todd, this is a direct. Everybody loves Kathleen. She has a PhD in psychology.

Jill DeWit:                           I know

Jack Butala:                       NPV is Net Present Value. All right?

Jill DeWit:                           Okay

Jack Butala:                       This is near and dear to my heart cause that's why were all here.

Jill DeWit:                           Exactly.

Jack Butala:                       We're all here to make money.

Jill DeWit:                           Right

Jack Butala:                       We're not here cause it's cool to build land. I mean it is cool to build land.

Jill DeWit:                           Right.

Jack Butala:                       We're really here to make some money. So, go ahead Jill.

Jill DeWit:                           Okay. This is going to be a long, brainy answer.

Jack Butala:                       Yes, it is.

Jill DeWit:                           I just want to warn everyone here. As a land investor.

Jack Butala:                       Cause it's important.

Jill DeWit:                           This shows going to be like an hour long.

Jack Butala:                       No, it's not.

Jill DeWit:                           Yes, it is. All right.

Jack Butala:                       Actually, it is.

Jill DeWit:                           So, here's one answer by a member. As a land investor, you are probably very interested in large parcels of land. There is something very exciting about buying a 40, 80 or 160 acre parcel of land. It's land investing version of big game hunting. But, bagging that large parcel is not always a great deal, let me show you why.

Jack Butala:                       Ding, ding.

Jill DeWit:                           [crosstalk 00:01:57] interesting.

Jack Butala:                       I love this. [crosstalk 00:01:59] I know it's lengthy, but it matters.

Jill DeWit:                           First, we are going to have to break out our financial calculators. If you don't have one, I suggest an online version. Before you break out into a sweat, understand we are only going to be using a few keys.

Jack Butala:                       And, it's the term of the sale. How many months? How many years? I is the interest. They call it a yield but it's really interesting. PV, present value. This is the present value, in fact, where you enter the investment, the amount paid minus a down payment. And PMT is payment, monthly payment. Here's an example, I purchased a 40-acre property for three-thousand bucks. That sounds great. When I sold the property, it was $500 down and $200 a month for 72 months. Now, let's see what the yield is. What were really, if you're bored by this,