Choose Real Estate Specialization (CFFL 541)
Transcript:
Jack Butala: Jack Butala with Jill DeWit.
Jill DeWit: Hey there.
Jack Butala: Welcome to our show today. In this episode, Jill and I talk about choosing a real estate specialization. Seems kind of basic, but man, it's important. 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: Okay. Joshua asks, "In the education program, Jack recommends including agricultural land data in our search criteria. I had decided on a county to send my first mailer to, but I've noticed that the majority of the parcels listed had the land use description of Agricultural NEC. Would this be a red flag for targeting this county, or could I be looking at this differently. In theory, I thought having the major percentage of my list focused on residential or recreational would be best. Thanks for any insight."
Jack Butala: NEC, as I understand it, and I don't know the exact N-acronym, I'll look it up during the show and try to find out exactly what it stands for, but what it generally means is not categorized. Not is the N, and C is categorized, I think, and I'll make absolutely sure. I just found it, No Existing Category, so it means that the assessor thinks it's agricultural, but it's NEC, or they think it's industrial, but it's NEC. That's your assessor at work, by the way. That's your taxes.
Jill DeWit: Would this be a red flag? Oh gosh.
Jack Butala: No. You know what? To directly answer your question, I love NEC property because hey, if the assessor doesn't really know, I'll figure it out. We're going to let the guy who owns it and me, the buyer, we're going to put a price on it real quick, so keep that in, absolutely.
Jill DeWit: Totally.
Jack Butala: To directly answer your question again, the only reason I would remove agriculture is if you're working on a very farming intensive county. Farmland is a commodity that's usually priced per acre. If you walk into a bar or a coffee shop somewhere in Kansas and you say, "Hey, what's the price of an acre go for these days," everybody will jump right up and say, and they'll be pretty close about it, but their answer's going to be very consistent, "Oh, it goes for about $8,000 an acre or $3,000 an acre or $3,250." If you're working those areas, you want to price your mailer the way that we price houses. You want to come in under that number. Decide what it is and come in 60-70% under that number.
Jill DeWit: Traditionally, what you're saying too is farmland is much higher than just out there rural residential vacant land.
Jack Butala: Desert land, yeah.
Jill DeWit: That's the whole point here.
Jack Butala: It's priced much lower, much, much lower than property that's about to be developed like a developer property for subdivisions.
Jill DeWit: Exactly.
Jack Butala: That variance, by the way, this is a topic for a whole show. All of us have driven down a street and then two months later, you drive down it and you're like, "There used to be a farm there, and now they're putting roads in."
Jill DeWit: It's a strip mall or something, exactly.
Jack Butala: That's why we're here, by the way. That person, whoever is doing that development, they're creating equity. That's the takeaway from this question, but whatever you do, you want to create equity. You don't want to just make property move around, if you know what I mean.
Jill DeWit: Right.