Plan for Your Last Acquisition (LA 790)

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:                            And I'm Jill DeWitt, broadcasting from gorgeous southern California.

Steven Butala:                   Today Jill and I talked about planning for your last acquisition. What the heck does that mean?

Jill DeWit:                            It sounds kind of sad.

Steven Butala:                   The gist of it is this: you want to have control over the end of all this, not have it control over you.

Jill DeWit:                            I like that.

Steven Butala:                   So it's something that they teach you in business school, and it's conventional wisdom for everybody who ever buys a company or buys an apartment building. But it's something that, it's worth discussing here. For sure.

Jill DeWit:                            Thank you.

Steven 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.

Jill DeWit:                            Joe asks, "For those of you who create financial forecasts or annual operating plans ... "

Steven Butala:                   That would be me.

Jill DeWit:                            Right? That would not be me. "What time frame do you use for estimated days on market on acquired properties? I realize the logical question I will receive is, 'How long has it taken you to sell your land in the past?' While nine days seems reasonable, I'd love to hear the average time it takes other members to sell their land and if they forecast a more conservative time frame. Thanks."

Steven Butala:                   I run it, this is a good question.

Jill DeWit:                            Yeah.

Steven Butala:                   I run it. Or I can input it.

Jill DeWit:                            What does that mean?

Steven Butala:                   So I run all of our forecasts. If you've ever watched any of our education or seen a live event, I'm constantly in Excel running if-then scenarios. So I run it at 30, I run it at 60, and I run it at 90. I never, I don't take it past 90. If you have a property that doesn't sell and it takes longer than 90 days, and we've all had them, I'm just saying if this is the norm for you, there's something wrong.

Jill DeWit:                            Something bigger.

Steven Butala:                   Yeah.

Jill DeWit:                            Right. Like you're pricing them too high.

Steven Butala:                   Or you're not ... The right people aren't getting ...

Jill DeWit:                            Notified.

Steven Butala:                   ... to know them, or you're buying really bad property or there's just some kind of flaw. So for houses it should be cash in, cash out, 30 days.

Jill DeWit:                            Right.

Steven Butala:                   In this market. And that will change, but, houses 30 days. Info-lots, 45. Rural vacant land, 60.

Jill DeWit:                            Depending on how big it is.

Steven Butala:                   And then I would run a worst-cast at 90 days, but.

Jill DeWit:                            I mean dollar amount, not ... Dollar amount and size.

Steven Butala:                   Yeah.

Jill DeWit:                            But yeah....