On Site Land Improvements Never Pencil (LA 1570)

Transcript:

Jack Butala:

Steve and Jill here.

Jill DeWit:

Hello.

Jack Butala:

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

Jill DeWit:

And I'm Jill Dewitt broadcasting from pretty Phoenix, Arizona.

Jack Butala:

Today, Jill and I talk about how on-site land improvements never pencil.

Jill DeWit:

Okay, explain this again. Please.

Jack Butala:

Land improvements are stuff that you buy a piece of land, and there's always this question, especially with our super new Land Academy members, "Well, I should probably clear it, and make sure you can see it, and then maybe I should put a well in." Yet, there's all kinds of stuff, and we'll talk about all the possible things that you can do. And I'll tell you the vast majority of the time it doesn't pencil. It doesn't make sense financially.

Jill DeWit:

Who came up with that? Who came up with the whole pencil thing?

Jack Butala:

I have an accounting background and I'm from the '80s.

Jill DeWit:

I know, but who came up with it? I was ready to say I have a kind of background from the '80s, and I still don't know who came up with that saying.

Jack Butala:

Well, you're from California too, so that there's a lot probably involved in that too. Penciling is just a way of saying, "Hey, let's make it-"

Jill DeWit:

You heard that.

Jack Butala:

"... Let's pencil this thing out before we actually go do it."

Jill DeWit:

Okay.

Jack Butala:

"Before we spend any money on it."

Jill DeWit:

Thank you, got it. Listen, soup to nuts, I'll give you soup to nuts.

Jack Butala:

Jill's constantly making fun of the sayings that I think are normal and everybody understands.

Jill DeWit:

No one in the planet says soup to nuts, or bajillion.

Jack Butala:

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, and if you're already a Land Academy member, please join us on Discord.

Jill DeWit:

Michael wrote, "Hi, I've a signed purchase agreement from a recent mailer for a 10 acre parcel in Northern Arizona. Initially I felt that I over offered in the price, but then I talked to the seller who stated there's a shared well on the property. I reviewed the docs and feel comfortable with this being a great deal, that was until I visited the property and saw two derelict abandoned trailers with no wheels and a vehicle on the property, as well as two generators, and a heap of put trash and debris. Apparently this belongs to the uncle who willed the property to the current owners before he died. Otherwise this could be a great deal, which I think I could sell for three times our purchase price. Just not sure how to deal with the abandoned trailers and vehicles, any ideas would be greatly appreciated." Ready? Go.

Jack Butala:

If there's stuff on the property already 99% of the time it's better than just having big vacant land, unless, and there's only really one exception that I can think of, where the EPA might have an opinion about it, like an old storage tank, fuel tank, or tanks underground.

Jill DeWit:

Or, Refrigerator.

Jack Butala:

Or, 500 refrigerators leaking Freon. Doesn't sound like that's the case here at all. Sounds like you've got a couple of generators, which might be great. You know, the vast majority of the people that are going to want really rural property are really interested in all the things you described. They don't want... It's not like buying a house where it's you want to walk in and there's music playing and you move your stuff in, and it's beautiful. It's just not, it's a completely different mindset.

Jill DeWit:

This is...

Jack Butala:

People, they want a rural piece of land to get away from everybody and put their own trailer, and fix a trailer up. There's generators out there, I'm telling you, if there's two generators out there...

Jill DeWit:

That's worth something.

Jack Butala: