Jill's Confused about Our Accountants Email (LA 1560)
Transcript:
Steven J Butala:
Steve and Jill here.
Jill DeWit:
Hi.
Steven J Butala:
Welcome to the Land Academy Show, entertaining land and investment talk. I'm Steven Jack Butala.
Jill DeWit:
I'm the patient one sitting next to the impatient one. My name is Jill Dewit and we're broadcasting from awesome Arizona.
Steven J Butala:
Today, Jill and I talk about why is Jill confused about our accountant's email?
Jill DeWit:
Good. Don't say anything. I'm going to read you what we wrote in a few minutes, and then I'm going to read you what his response was. I went, "What the heck is this all about? It's interesting. We'll talk all about it.
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. If you're already a Land Academy member, please join us on Discord.
Jill DeWit:
John wrote, I'm curious how others may approach pricing this situation, small county with only two zip codes. Good, not great market. Has a lake, but the lake doesn't appear to influence home values. Only doing less than one acre lots. Here's what I'm trying to square up. Medium home values are between 200,000 and 250,000 and Zillow searches reinforced that pricing.
Jill DeWit:
The Kelly treats most of the lots, like they're worth a couple of beers and not much more, except for a handful of properties that they think are worth between 60 and $70,000. Nothing vacant is currently for sale. Taxes seemed to have no relation to valuation of properties. One lot sold in the past year for $10,000. Would you price off of the homes and risk over pricing? Price off of the county and offer people wide range of prices and negotiate your way to deals or price off that one sold comp and then negotiate each deal?
Steven J Butala:
This is a brilliant question. How should I price something when I have no real data? How can I make a business decision without any real data? Not just for land, but anything, because all decisions should be made on ...
Jill DeWit:
Real information.
Steven J Butala:
Empirical data and not emotion. That's exactly what John is doing here. By the way, there's lots of Johns in our group. This one really knows what he's doing. You know who you are. I love testing new markets like this. If nothing's been purchased or sold or recorded, nobody's there doing anything.
Steven J Butala:
This is what I want you to do, I want you to go in there and just crush the price so low it's silly. There's going to be a bunch of low hanging fruit. Just get it all on that first run. There's a chance that you price it way too low and it'll bust. I haven't experienced that, neither has Jill, and most people ... I'd bet John, you haven't either. I don't think anyone has had it just completely failed.
Jill DeWit:
I argue.
Steven J Butala:
Mailer.
Jill DeWit:
I'm going to argue off failed mailers. It's usually not the mailer, it's something wrong with an area or something.
Steven J Butala:
You got $200,000 houses on smaller lots, less than an acre. I would go in and just start offering five to $8,000 just across the board for both zip codes and see what happens. It probably bites. This is what usually happens when I do this, we buy two or three, four properties, maybe. Hopefully the data set's big. If it's a thousand unit dataset, now, that's a little scary. But, if you've got eight or 8,000, let's say, vacant properties, I'd go in across the board. Forget about the lake. Go in across the board, in at $10,000, maybe 8,000, maybe seven or whatever pricing scheme you come up with. You're going to buy a few most likely, hopefully a few more. Then, you're going to find out where that magic ... by the way, you're operating all by yourself here. Nobody's doing anything else.
Steven J Butala:
You're going to find out where that threshold is. There's a threshold in every single market. I think it'd make a lot of sense, then,
