These are Tough Times. Here's Our Response (LA 1281)

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 sunny Southern California.

Jack Butala:

Today, Jill and I talk about how these are tough times and here's our response about what to do. As promised yesterday, Jill and I are going to share a little anecdote in the beginning about how we've handled this kind of thing in the past and, actually, how our families have handled it in the past to very positive outcome.

Jill DeWit:

Ready?

Jack Butala:

Before we get into it, let's take a question-

Jill DeWit:

Oh, I thought you meant the beginning right now.

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.

Jill DeWit:

I got confused. I thought you meant the beginning, beginning, not the beginning, beginning.

Jack Butala:

If you're confused on this side of the camera, imagine with the listeners and watchers are going through.

Jill DeWit:

I can imagine. Jessica wrote, "Hi, I'm looking at a new county where the days on market are okay-ish. They average out to about 103 and there are no low acre property listings on the land sites. The smallest I can find for sale is 30 acres, but on Zillow, there are many listings in the low acres, like, 17 of them between 2.1 acres and 11 and a half acres, almost all with long days on markets in the hundreds plus. So I guess my question..." She wrote that, I guess, she's looking for a response.

Jack Butala:

Yeah. She's, "So, what do I do?" So to me, this is a data question.

Jill DeWit:

Do I move on or do I do it?

Jack Butala:

Yeah. This is a data question and here's the thing. This is actually somewhat of the meat of the show here, from a real estate standpoint. The land sites like LandWatch, Land and Farm, land.com, I guess CoStar owns a lot of these now, their customer is a guy with the cowboy hat who really is into that lifestyle. And it's typically not on those land sites, the guy who builds houses or apartments, not a developer or commercial real estate person. And it's generally not a person who just... it's generally not our customer. People who list on those sites are our colleagues.

Jack Butala:

Now you take a place like Zillow. Zillow's got an IDX feed from all the MLSs, or most of them. And they also allow people to just post property. And so, Zillow is a true high-bred or a true, let's call it a mishmash slash, I don't know... It's just real. It's raw. So, you can get some great data out of there. The cowboy hat people generally don't want to horse around with a quarter acre property.

Jack Butala:

So, Jessica, this is a fantastic diamond-in-the-rough type question, because I love that you're going out and trying to figure out what the days on market are anyway, just to see whether or not you should send mail there. You're hugely ahead of the curve for most investors just by looking at that.

Jack Butala:

But I think the smaller properties are real important because if you see a super, super, super, super cheap, small Anchorage property, that's kind of a red flag for me. If you see properties all over the county that you're looking at listed for 3, 4 or $500, it really devalues the larger acreage property in my opinion, most of the time.

Jack Butala:

So here's my answer. Use Zillow, as much as you can. Crosscheck it against the other sites like you're doing, but also throw in realtor.com and redfin.com, which are MLS real estate agent listed properties only. And when you take a look at all that data, line it up in a spreadsheet, don't spend a ton of time on this, but just generally test it for reason, you're going to get the real picture. And then, if you've got a DOM for raw land at about 100 days, you're good.

Jill DeWit:

At a hundred?

Jack Butala:

Yeah.