Regret or Reward a Few Years from Now (LA 730)

Transcript:

Steven Butala:                   Steve and Jill here.

Jill DeWit:                            Hello.

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

Jill DeWit:                            And, I'm Jill DeWit, broadcasting from sunny southern California.

Steven Butala:                   Today, Jill and I talk about regret or reward a few years from now. Which one would you rather have?

Jill DeWit:                            Boy, that's a big, big, big question. I don't know how we're going to do this in one show.

Steven Butala:                   I have a lot of personal questions for you this show.

Jill DeWit:                            Oh, this ought to be good.

Steven Butala:                   You can decline them, if you want.

Jill DeWit:                            No, no. I like this.

Steven Butala:                   Plead the Fifth.

Jill DeWit:                            Oh, no. It's all good.

Steven Butala:                   Decline. Before we get in to it with Jill, let's take a question posted by one of our members on thelandacademy.com online community. It's free.

Jill DeWit:                            I'll answer anything, as long as it doesn't appear to be throwing me under a bus.

Steven Butala:                   Oh, my gosh. I would never do that.

Jill DeWit:                            Okay. Thank you. Do you regret, or are you rewarded with X? Okay. Savannah asks, "I'm curious as to why the purchase agreement template suggests that the seller can retain mineral rights. I'm working on a deal in Texas, and the seller wants to retain mineral rights. Doesn't this mean that the seller wants to have the right to drill for oil even when the property is owned by someone else? If that is the case, who would buy this property?"

Steven Butala:                   Okay. The reason that that's in there was because I was tired of answering the question, "Hey, can I keep the mineral rights? Can I? Can I, Dad?" That's my way of saying ... and here's the methodology behind it. We're not in the mineral business. We're not miners. There are tons of people in the planet who are miners. They are in the mineral business, and they hate surface rights. They hate our business. They don't want any part ... It's actually a burden to them to deal with owning the property and paying the taxes, and stuff. They would rather lease the surface from you and do their business under there. Which, frankly, I would rather do that, too, because I am not in the mineral rights mining business, and I have no interest in that.

                                                Jill and I just did a deal last year where there was an existing lease ... I think it was natural gas well on a property that we bought. All it did was complicate the deal. This is what we like.

Jill DeWit:                            Everybody got all hung up on it.

Steven Butala:                   We like to buy a property for 20 grand and sell it for 40. No leases, no mineral rights, no problems, nothing. Just a lonely little piece of beautiful property that nobody knows about, that we bought for half price.

Jill DeWit:                            Right. Someone could put a cabin there, and enjoy it, and love it. That's it.

Steven Butala:                   Yeah. Little House on the Prairie material. Mineral rights complicate everything.

Jill DeWit:                            Right.

Steven Butala:                   You know what? You can have your mineral rights. That's why it's in there. It's not for everybody, but it works for us.

Jill DeWit:                            Right. By removing us from that whole issue, Savannah, we just never talk about it. We never even ... If I bought something with mineral rights, and I'm trying to sell it with mineral rights, hey,