Top 3 Reasons New Real Estate Investors Fail (LA 1039)
Transcript:
Steven Butala: Steve and Jill here.
Jill DeWit: Good day.
Steven Butala: Welcome to the Land Academy show, entertaining land investment talk. I'm Steven Jack Butala.
Jill DeWit: And I'm Jill DeWitt, broadcasting from sunny Southern California.
Steven Butala: Today, Jill and I talk about the top three reasons new real estate investors fail, in our opinion. And I have to share with you, we are pre-recording these episodes because we are happily taking a vacation, a well-deserved vacation, in Santa Barbara the week that these air, or I guess the week before.
Jill DeWit: No, the week these air. Oh no, it was the week before. You're right. I'm all confused.
Steven Butala: See this big smile right here? See it?
Jill DeWit: So who knows where I'm waking up right now and what we're doing right now, but we probably just had a week of craziness.
Steven Butala: Yeah, after this is airing, that's exactly it.
Jill DeWit: Exactly.
Steven 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: Marcus asks, "I've been pricing by zip code and when looking at comps, sometimes there are parcels in different towns, but the same zip code. However, these are parcels in a different county." That's nutty.
Steven Butala: It happens all the time. Zip codes are for the post office. The county is for government.
Jill DeWit: Right. "So my gut tells me I'm overthinking this and just price by zip code anyway. This happens because when getting comps, I'll put X county in the lands of America, et Cetera, and make a list of the prices and acreage for each zip code. Then when I download data for the county, I find new zip codes for which there were no comps. So I go back to the land-"
Steven Butala: This is very intelligent.
Jill DeWit: "-Websites, put in that zip code and bam, there are comps for those zip codes which are located in other counties. I feel like I'm doing something wrong here."
Steven Butala: You're not. You're not doing anything wrong.
Jill DeWit: "It's been a long week. Sorry, if none of this makes sense." This is awesome. You're good Marcus. That's so darn funny.
Jill DeWit: Alright, so Kevin our moderator, responded already and his reply is, "Marcus, I used to get hung up on finding all the rights of cuts of pricing in a county. Here is the easy way that I use now. Download the data, sort by zip code, copy that zip code column into another tab. Remove duplicates. This is your list of zip codes to price. Then I just go to LandWatch or realtor.com et cetera. Plug in the zip codes and one at a time, get the comps."
Jill DeWit: Does that make sense to you? Did I answer your question? Sure you did. That was a good quick tip.
Steven Butala: I completely agree with Kevin here. I believe that I knew there's a larger string that goes on that we don't have. It's beyond the scope of reading this here. Poor Joe, you know?
Jill DeWit: Yeah. and our listeners.
Steven Butala: And the fact is this person's... It's rural vacant land. If it was [info lots 00:02:59] , I'd have a different answer. They were trying to cash a [info lot 00:00:03:02] mailer. In rural vacant land, the chances are of having a materially different price per acre with comparison values and everything. When half of a zip goes in one county and half's in the others is very, very, very small.