Lessons from Data Obsessed People (CFFL 554)
Transcript:
Jack Butala: Jack Butala with Jill DeWit.
Jill DeWit: Happy day.
Jack Butala: Welcome to our show today. In this episode, Jill and I talk about lessons learned from data obsessed people. Jill wrote that title.
Jill DeWit: I did.
Jack Butala: I wonder who she's talking about?
Jill DeWit: I'm excited.
Jack 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 DeWit: Luke Harris asks, "There are some HOA properties I'm making offers on. I figure their fees kill the price of the land, and it gets it in a range, I might have a shot at it. Also, thinking how much of an HO fee is too much. The ones I'm looking at right now are $43 a month, on little house lots. You get paved roads, trees, golf, lake, and other stuff. But $43 a month on an empty lot? That makes a high default rate on these." I understand. We've done those areas, and it does rack up really, really fast.
Jack Butala: The truth is this, we have a tremendous amount of experience with HOA land. There's some great stuff, and some bad stuff. By the way, all HOA property, land, not houses or condos, they have a bunch of people sitting in an office, usually if the subdivision is big enough, and their whole job is to handle defaulted properties and manage fees and stuff. If you get to know them ... And guess what, Jill knows them on a first name basis. They always have lien sales, and they have properties that they've taken back. You can cut a great deal with them on these properties. I don't care what they say, they have a list somewhere of properties that are for sale. Before you go buying properties from owners in these subdivisions, check out the HOA itself. Did I just take away all your thunder?
Jill DeWit: No, it's okay. That's exactly what I was going to say. Keep going.
Jack Butala: No. Luke, I think you're right on the right track. Would I put all my money into one subdivision with an HOA? No. But I think that you could do okay. Just make sure ... The basic stuff that we do, applies. Make sure you're buying them way cheaper than you're going to sell them for, and make sure that they're good properties. All the HOA subdivisions have ... They're all broken up into units. Like unit one, unit eight. What you want to do is get used to saying this to yourself, "Unit one rocks, and I can sell those properties really fast. Unit 18, it does not."
Jill DeWit: It's way out there.
Jack Butala: Yeah.
Jill DeWit: It's only dirt roads at this point-
Jack Butala: It's real different.
Jill DeWit: ... and all that.
Jack Butala: Exactly, Jill.
Jill DeWit: You what I would do too, Luke? I would either A) ... Say you're buying it really, really cheap, because HOA fees are really high, and you're actually buying it from a seller, which is ... Unless a seller has 10 of them, it doesn't make a lot of sense. You wouldn't just buy the one off, you'd go right to the association. Either way, I'd want to start fresh. If I'm buying it really cheap from the seller, which is actually not my first choice, so I'm going to skip that one. My first choice is, now that I've identified this area and these are good properties, I'm going to the HOA. I'm getting a list from them, which is what you can do. They will email you a list, and you can go and look on the map and pick out the 10 that you want, or the five that you want. Whatever it is, like Jack says.