East Coast vs. West Coast Investing (CFFL 563)
Transcript:
Jack Butala: Jack and Jill here.
Jill DeWit: Hey.
Jack Butala: Welcome to the show today, and this episode Jill and I talk about the differences between the east coast and the west coast with real estate investing. Man, they're different. We do lots of deals in both places and we'll talk about what's a little bit different for us.
Jill DeWit: It's funny 'cause you're east coast and I'm west coast.
Jack Butala: I know. Opposites don't attract. Trust me.
Jill DeWit: Aw, Jack.
Jack Butala: We'll get into that in a second.
Jill DeWit: Alright.
Jack Butala: I don't think we're opposite at all.
Jill DeWit: Okay.
Jack Butala: I think that what drives us is exactly the same. Before we get into all that though, let's take a question. Posted by one of our members on the LandInvestors.com online community. It's free.
Jill DeWit: Good save. Billy asks, "I'm in negotiations on my first deal, so please bear with me. I'm negotiating at my own pace, and she keeps coming to me with lower offers, although still not low enough. Her latest offer is 10 acres for $5,000 and she'll pay the $1,700 in back taxes from the $5,000. She said that's a good deal based on the assessor's value."
Jack Butala: She's wrong.
Jill DeWit: "I need to get her down to $3,000. How would you explain to a seller that the assessor's value is no indication of a property's market value?"
Jack Butala: Just like that.
Jill DeWit: "Also, what's an efficient way to find land comps?"
Jack Butala: Let's take this one at a time. When somebody is negotiating with themselves like this person, where she says, "I'll take $5,000 with $1,700 in back taxes." Then they come back and say, you say, "No." They come back and say, "Oh alright, I'll pay the back taxes if you get me the $5,000." You say, "No. I already gave you an offer on my ... When I sent it out, it was $3,000." She comes back and says, "Well, will you take $4,000?" So what they're doing is negotiating with themselves, and I'm here to tell ya, 15,000, almost 16,000 transactions later, they're gonna sign you this property.
There's been certain situations where I was directly involved years ago in negotiations like this, and I said, "You know what? If you call me one more time, I'm not gonna buy your property." So in this conversation that we're gonna have, I'm gonna tell you that I'm gonna pay $3,000 for it and you're gonna say yes or no. Nine times out of 10, they say yes.
Jill DeWit: No, I love it.
Jack Butala: Jill's just like whatever Jack.
Jill DeWit: You just ... That was a little rant there.
Jack Butala: I was.
Jill DeWit: So I'm like I'm just ... I'm out.
Jack Butala: You know what? It was.
Jill DeWit: I'm actually stepped aside, I'm not in your way.
Jack Butala: Here's why it was a rant. I hate negotiating. I sent you an offer for $3,000, sign, and send it back.
Jill DeWit: Yeah, we're not negotiating.
Jack Butala: By the way, I didn't know there were $1,700 in back taxes on it, now the offer is $2,000 or $1,000.
Jill DeWit: We're not negotiating because I hold all the cards 'cause I have the money.
Jack Butala: Yes.