Real Cost Using Data to Purchase Undervalued Property (LI 704)
Transcript:
Steven Butala: Steve and Jill here.
Jill DeWitt: Hello.
Steven Butala: Welcome to the Land Investors Show, entertaining land investment talk. I'm Steven Jack Butala.
Jill DeWitt: And I'm Jill DeWitt, broadcasting from sunny southern California.
Steven Butala: Today Jill and I talk about the real cost of using data to purchase undervalued property. The actual cost, the price per unit I should say, or included in that is the actual cost of not using it. Trying other ways and methodologies.
Jill DeWitt: Good point.
Steven Butala: And the real cost of actually not using our experience, which is free.
Jill DeWitt: Right.
Steven Butala: But before we get into that, let's take a question posted by one of our members on the LandInvestors.com online community. It's free.
Jill DeWitt: Okay. Matt asked, "Hey everyone. I didn't see any threads on this topic, so I thought I'd start one. Someone offered to sell me a parcel of vacant commercial land."
Steven Butala: Love it.
Jill DeWitt: "I usually stick to residential, but I was curious what differences commercial might pose. What due diligence steps exist for commercial that aren't there for residential? What's the sales market like compared to residential? Do you post it somewhere else, like LoopNet?"
Steven Butala: Yup.
Jill DeWitt: "How do you gather comps? Thanks in advance. Sincerely, Matt."
Steven Butala: Great questions, Matt. We buy commercial property probably once a month here, and the first thing I do is go onto the EPA's website, the Environmental Protection Agency, and make sure that the property is not logged in there, it's not part of super [inaudible 00:01:28] site, and more importantly, and I think this gets overlooked about commercial property all the time, is what's going on in the immediate area of the property.
I'll give you a very, very quick story. I did a commercial real estate deal a lot of years ago that it got terminated and didn't close. Broke my heart actually. I was really young, I needed the money. Didn't close because there was a former gas station three blocks away, and it had a tank that was still in the ground and the lender said they wouldn't lend on it based on that.
Jill DeWitt: Because it was too close.
Steven Butala: Yeah.
Jill DeWitt: Well, it could happen.
Steven Butala: Yeah, which is really silly. There's a lot of people get real heated in real estate about the EPA and how they're vigilante about it. But that's a time for a different debate. So, that's the real difference. And then LoopNet is if it's a real piece of commercial property, and LoopNet is the single place to buy and sell commercial land.
Jill DeWitt: Aren't mobile lots considered commercial?
Steven Butala: Well, that's another thing. Yeah, sometimes. No, mobile are considered mobile. But the thing with commercial property is that you can zone down.
Jill DeWitt: I love it.
Steven Butala: So, go ahead, Jill.
Jill DeWitt: So, depending on where it is, I usually get excited about it. So, if it's vacant commercial land and it's way out somewhere that they thought they were going to do this town, and it never really panned out, the beauty of commercial is you have a lot more options, and often you can use it for mobiles. With the way properties go, it's much,