How to Raise Capital and How Not To (LA 1106)
Transcript:
Steve Butala: Steve and Jill here. Welcome to the LandAcademy Show, entertaining land investment talk. I'm Steven Jack Butala.
Jill Dewitt: And Jill Dewitt broadcasting from sunny Southern California.
Steve Butala: Today Jill and I talk about how to raise capital and how not to. It seems like a simple topic, doesn't it?
Jill Dewitt: It does, but this is something that hangs people up.
Steve Butala: Yeah, sure.
Jill Dewitt: They're really worried about this.
Steve Butala: It ties into yesterday's show about-
Jill Dewitt: It kind of does. Like, I've got these deals. What do I do? Or I'm afraid to even send it out cause I don't have the money. What do I do?
Steve Butala: It's a hard thing to get over. It was a hard thing for me to get over a long time ago.
Jill Dewitt: We can help.
Steve Butala: Yeah. 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 Dewitt: [Aristio 00:02:35] asks, "Howdy, folks? I have a signed purchase agreement in East Texas on a 4.25 acre piece of property with good dirt road access. It's off a major highway. I have to verify the exact location of the parcel given." Oh, interesting. Title Pro 24/7 and parcel factor showing different parcel locations. I can tell you why in a second.
Steve Butala: This is very common.
Jill Dewitt: Yeah, I'll tell you what it is. "I think this parcel would make a great mobile home lot, et cetera for someone or perhaps even establishing a small farm. The gentleman is elderly, an elderly man has been paying taxes on his deceased grandmother's lot for years. The other family members, uncles, aunts, et cetera, never wanted to contribute or pay for the taxes. We've tried to asking this gentleman for any other possible heirs, however, he states they've all passed away. I'm considering doing quite a title on this property if I can at least double my offer price. That needs to sell. So $11,465, indeed, I've been told I priced this [inaudible 00:01:47] high, was the after cost. Most folks will leave this parcel alone. I think there's a lot of opportunity for those with those patience to tackle these. Any suggestions or advice would be greatly appreciated. Thank you." And then "PS, the seller also states he has two other properties in New Mexico he's needing to sell. My hope is I can tackle those as well. Incidentally, the property is zoned commercial, vacant. Not sure if it makes it difficult to build on."
Steve Butala: Make it easier.
Jill Dewitt: Yeah. "There are farms in the area so I'd be surprised that there is an issue. I have another signed offer with the same zoning closer to town, but densely covered in trees." Okay, we're going to jump in real quick here and I'll answer. I'll put what Kevin put first and then we'll add our comments.
Steve Butala: Sounds good. Kevin, our moderator.
Jill Dewitt: Yep. So Kevin already wrote in and said "Aristio, I assume that the property's not in the seller's name. So quiet title will cost about two to $3,000 and take about three months. In three months, you could have done at least six more deals. I would only consider this if the comp value was $50,000 or more. Go for low hanging fruit. Work smarter, not harder." And I really love that.
Steve Butala: When has Kevin ever given bad advice?
Jill Dewitt: I know.
Steve Butala: Not once that I can think of.
Jill Dewitt: Exactly.