Land Investors Mitigating Risk
Recording Location: 33.841318 -118.391593
Transcript:
Jack Butala: Jack Butala with Jill DeWit.
Jill DeWit: Happy Friday!
Jack Butala: Welcome to our show today. In this episode, Jill and I talk about how land investors mitigate risk. And I have to admit, I'm excited about talking about this. I talked about it a little bit on our weekly call-in Thursday, and decided to do a whole show on it, because I haven't thought about it in a while but man, this is so much less risky than flipping houses.
Jill DeWit: Totally.
Jack Butala: Before we get into it, let's take a question posted by one of our members on the Land Academy community website. It's free.
Jill DeWit: Okay, Ryan asked, "What is fractional ownership of a parcel?"
Jack Butala: I can tell you, I found out what this is the hard way.
Jill DeWit: This is gonna be good. All right, we're not picking on you Ryan, I promise. This is funny. "Is there anything I can do about it when I'm trying to acquire a parcel with fractional ownership?"
Jack Butala: Don't, don't, don't do it.
Jill DeWit: Don't.
Jack Butala: Don't buy-
Jill DeWit: Great, do you really want one third of that property?
Jack Butala: Quite some time ago, somebody in California got the bright idea to assign APNs, assessor's parcel numbers, to individual owners of fractional ownership. Like if Jill and I went and bought a piece of property, 40 acre property, it would get two APNs.
Jill DeWit: Right.
Jack Butala: You can predict what's going to happen. It turned out to be a massive mess. One person passes away, what happens? We don't know.
Jill DeWit: Exactly.
Jack Butala: It said, to rectify it now, title companies and attorneys, they rectified it by different ways to take title.
Jill DeWit: Right. Tenants in common.
Jack Butala: Tenants in common, joint tenants, lots of different ways. So if one person passes away, the way that title is taken it addresses that upon-
Jill DeWit: Dictates what's going to happen.
Jack Butala: Yeah, that's right, and that's the right way to do it. I have percentile letters, like all of us, offers over the years, and incorrectly sent them to fractional ownership. It's hard itself, you're looking at a list of APNs, which ones are and which ones aren't.
Jill DeWit: Right.
Jack Butala: And accidentally bought a fractional, you know, closed the deal. And you don't want to do that.
Jill DeWit: Don't want to do that.
Jack Butala: Because it's just impossible to track the other person down. Maybe they passed away, their heirs are wherever. It's a mess. It can be a mess.
Jill DeWit: I still see it, by the way.
Jack Butala: The only way to rectify is quiet settling it.
Jill DeWit: Yeah, well I would say, we still have one or two that we just said we're not going to worry about it. We just let it go. And I still see the taxings coming through where it shows our company name with this other guy's name on it.
Jack Butala: This is from like eight years ago.
Jill DeWit: Ivan something, and I'm like, 'This is hilarious.