The Maximum Price Per Acre we will Pay
Jill DeWit: Welcome to the Cash Flow from Lynn Show. In this episode, Steve and I talk about the maximum price per acre we will pay for any property. It's a mix. It's different from other land investors. Normally, Steven is the host. For a few episodes, I get to be the host. Get to interview him.
Jack Butala: I love this too, by the way.
Jill DeWit: Thank you very much. Welcome Steve. Thanks for being here.
Jack Butala: Thank you.
Jill DeWit: This is a very interesting concept to, not only me, but a majority of our listeners, I should say. When I join the team, I ... It's interesting for anyone to ... What you think something's worth, and what's it's really worth, are two different things. Then you have to understand what makes a property different. Why aren't all the properties in ... Not even just within the State, but within the County. I learned about attributes. All the things that you looked for. Please explain more for us.
Jack Butala: Yeah, this topic is one that shocks most people the first time that they hear about it. It shocks season to real estate investors. Everything from season investors to the absolute newest person ever. Newest person in the business. With the maximum price that we'll pay, with a very few exceptions, is $100 an acre. 10 acres is $1,000. 15 acres is $1500. 40 acre property is $4,000. When we get the real large property in, like 300 or 400 or 500 acres, we even pay less than that. $100 an acre is always been a gauge. We gauge depending on the seller. That's where we try to be less in that, quite honestly.
Over the years, I've developed a few examples or analogies to answer this question. After they've picked their job off of their desk. They find out that we only pay $4,000 for 40 acre property, I've to explain it to them. Try to soften it a little bit by saying this, or something like this, "You've a few choices. If you're going to get in your car and go buy some milk. You have a few choices. You can buy it at Walmart, which is the cheapest place. You can buy it at convenience store, which is the most expensive place, but it's convenient. In between is a supermarket.
I described that at times to our seller. I can have a check to you, seller, for 4,000 bucks for your 40 acres property by Thursday, like a person showing up by the door with a cashier's check for your signature. That's the convenience store model. You can wait 6 months. Hire a realtor. Go through all the stuff. They may or may not sell. For a lot of people, that's not big deal. Then maximum price that way. For our customers, and we identify these people, before we send them a letter. To see if they want to actually sell their property. We identify them as people that are probably ready to do that anyway. For a lot of reasons. We cover that in our programs.
That's the maximum price that we sell for property. I've got several other examples. Our members and our students use these examples, because they come across these situations too.
Jill DeWit: It makes sense.
Jack Butala: It's not as shocking as it sounds, I guess, in my point.
Jill DeWit: No, when you really say that, then it makes sense. I used to remember that my yard sale example. That was my [inaudible 00:03:35] . We've all had things in the yard sale, and you're just like, "I'll give it to you for a dollar. Get it off my lawn. I've been staring at it, taking up space in my garage for how long? I don't really care about it. I'm not trying to make money off it. It's in my way, kind of thing. I can't park here. It's a problem."
That's how people can get about land. I was going to retire there. I'm not going to retire there anymore. These bills, I hate getting these tax bills.
