Why Having Someone Else Fund Your Deals is Smart - We Do it Too (LA 1472)

Transcript:

Steven Butala:

Steve and Jill here.

Jill DeWit:

Howdy.

Steven Butala:

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

Jill DeWit:

I'm Jill DeWit, broadcasting from sunny Scottsdale, Arizona.

Steven Butala:

I think it's sunny is the staple.

Jill DeWit:

Just leave it as sunny. [crosstalk 00:00:17].

Steven Butala:

But it is sunny here, more than California.

Jill DeWit:

That's true.

Steven Butala:

Today, jill and I talk about why having someone else's deal, why having someone else fund your deal is actually a good idea. In fact, we do it all the time. We actually seek out partners to fund some of our deals, and the short version is, it depends on the deal. 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 member, join us on Discord, it's worth it.

Jill DeWit:

All right. So Andy wrote, and there's a note here that he's not a member, "In the process of browsing counties, I often come across areas where sorting low to high brings up similarly priced lots, but the acreage of the lots varies wildly. For example, I'm currently looking at a zip code in X state where half acre lots and 20 acre lots all seem to be in the 10 to $20,000 price range. I tend to avoid areas like this because of the huge discrepancy and it throws off my confidence in pricing. It would feel unwise of me to mail the half acre lots, offering 3 to $4,000, and then go on and mail 20 acre lots and offer the same amount. Any thoughts on how divided areas like this or how to get a better read? Do you ever just blanket mail a county with one offer price and then disregard acreage? Any thoughts? I appreciate it."

Steven Butala:

Always. What's important here is to get the mail out. This discrepancy in data, get used to it. This is one big... If you're a data person in another field or you're a retired pilot, or you got 30 years in public accounting, or you're a mechanical engineer, maybe you're retired. You know what looking at a data set like this and how frustrating it can be. And you've been doing it for decades. Welcome to Land Academy and welcome to real estate investing in general. Andy's already light years ahead of the clubhouse discussion that Jill was involved in this morning. Whereas they drive around and they'd look for dilapidated houses. They write down the address, they find the owner's name and they send them a kind little note saying, "Your house is a pile of crap. I'm happy to... Why don't you give me a call? I'll take it off your hands."

Steven Butala:

So Andy's already looking at data sets. He's realizing the data's not perfect. It's a little bit wonky and he's trying to figure it out and get into that real estate market through data, not through the actual real estate. So, if you're new and you're listening to these sentences that I'm saying, and the light bulb's going off over your head, this is for you. And expect some weird data because I know exactly where he's talking about him in New Mexico, and I know how I would do it, but it's all based on experience. So honestly, my opinion on this is just based on... Jill and I've done thousands of deals in New Mexico. So, in the beginning, this is frustrating for me, but not really. If you can crack through this data and figure it out, get it in a spreadsheet, go price per acre.

Steven Butala:

You're going to find similarities. You're going to dig through that data and scrub yourself down to a point where you actually do have confidence that this 20 acre property in this zip code is actually probably worth $12,000. So I'm going to go out. I'm going to offer everybody 2000 bucks. And so you have to just deconstruct the whole thing, chill out, get a good cup of coffee, make yourself a sandwich, turn all the lights off, spend three hours in a dark room,