How to Win in Life (LA 1368)
Transcript:
Steven J Butala:
Steve and Jill here.
Jill K DeWit:
Howdy.
Steven J Butala:
Welcome to the Land Academy Show, entertaining land investment talk. I'm Steven Jack Butala.
Jill K DeWit:
And I'm Jill DeWit, broadcasting from sunny Southern California.
Steven J Butala:
Today, Jill and I talk about how to win at life. What does that have to do with real estate?
Jill K DeWit:
How are we going to cover this 10 minutes or whatever? How funny. Yep, this is it. 10 minutes, we got this.
Steven J Butala:
This is going to be fun. It's Friday.
Jill K DeWit:
Okay.
Steven J Butala:
It's Friday, and at the time of Jill and I are recording this, which is the 29th of October, it's pre...
Jill K DeWit:
Election day.
Steven J Butala:
It's pre-Halloween, and the elections are done by the time this airs.
Jill K DeWit:
Oh yeah, that's true.
Steven J Butala:
So-
Jill K DeWit:
Hasn't happened yet.
Steven J Butala:
Maybe the whole world's on fire right now, we don't know.
Jill K DeWit:
We don't know.
Steven J Butala:
We're happily sitting here on October 29th telling you how to win at life, but we could all be dead right now.
Jill K DeWit:
Oh my gosh, thanks.
Steven J 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 K DeWit:
Okay, so Colin put a clip, is that what this is?
Steven J Butala:
This is an excerpt from the newsletter that I wrote and I'll read it, because I wrote it. But you can read the headline.
Jill K DeWit:
So, Colin wrote, a clip below from the Land Academy Newsletter. I'd like to understand the strategy a little bit better. Can anyone unpack it a little more? Thank you.
Steven J Butala:
Yes, I will unpack it, happily. In quotes, this is what I wrote. "I'd like to see properties with no improvement value, which is land, in ZIP Codes where the spread between the average completed sale value and the for sale values is the largest." Let me paraphrase. I go to ZIP Code 85258, which is Central Scottsdale, and I take all the properties out of the dataset. This is all free and I can do it in seconds on DataTree. Take all the properties out that have structures on it, so now I just have vacant land that's theoretically buildable in 85258.
I look at the for sale values of those properties. So, there's going to be a bunch of properties that are for sale, and I look at the ones that have sold. Here's all the values of those that have been sold, and you can do this on Zillow in seconds. Then I divide by the square footage and say, all right, the stuff that's for sale is $42 a foot, and the stuff that's been sold is $82 a foot. Oh my gosh. I can pay retail and still make money.
Well, wait a minute. I'm going to pit 85258 against 85251, which is an adjacent ZIP Code, and on and on and on. Why stop there? Why don't I just do every single ZIP Code simultaneously in the country and the first top five that have the widest variance where there's an accurate dataset, that's where I send mail. Then I go on to say, this tells me where to send blind offers. This is what I just said. Then I'd like to see within those geographic parameters what acreage range is the widest. So, if I just look at five acre properties, is that gap that I just described wider than 10 acres or less?
This tells me which owners or to whom to send the blind offers, the owners of the larger or smaller acreage property, however the data comes out. After scrubbing down the dataset, I'd like to know what the actual prices are. This tells me how much to send each offer and how to price it.
Jill K DeWit:
You know what this tells me?
Steven J Butala:
Jill, partner in life, I was just going to ask you, does this make sense to you?
Jill K DeWit:
Yes, but you know what this tells me? There's not an Easy Button for this. You got to think about some of this.
Steven J Butala:
If this is what I had to do today,