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Why We Have Not Missed the Housing Boom (LA 1635)
Transcript:
Steven:Steve and Jill here.
Jill:Hello.
Steven:Welcome to the Land Academy Show, entertaining land investment talk. I'm Steven Jack Butala.
Jill:There was a long pause there. I'm Jill DeWit and we are broadcasting from the Valley of the Sun.
Steven:Today, Jill and I talk about why we've not missed the housing boom at all.
Jill:Personally or all of us?
Steven:All of us.
Jill:Good.
Steven:This all comes from... Jill and I have children between the ages of, let's say 26, 27 and 18, and all of them and all of their friends have all throughout their entire... Let's call it late teens, early twenties have said, "Well, you guys are the generation or two generations before us. And thanks for wrecking everything."
Jill:"You guys are the last homeowners," like, "Hold on a moment."
Steven:To which I say, "I said the same thing to my parents," to which my parents have said, "That's what I said to my parents." 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. And if you... Oh, please don't forget to subscribe, I should say, on the Land Academy YouTube channel and comment on the shows you like.
Jill:David wrote, "Could someone give me some insight? I'm closing on my first deal. It's a 9.37 acre parcel. And in 20 days, there's not a ton of comps in the immediate area, and I was originally thinking about trying to sell it for around 30 to $40,000. But I've been doing a deep dive on research and looking at active listings. I noticed two neighboring parcels at 1.4 and 1.3 acres sold at 10,000 an acre, but it took four to six months. I'm very tempted to list it for $79,900. Even 70% of 10,000 acre at 65,000 and some change I would be thrilled with. I don't want to get crazy and list"... Oh, "I don't want to get crazy and list too high"-
Steven:That was my fault.
Jill:"And have to sit and/or not sell. Am I getting too excited with the neighboring properties? I'm licensed. I'm probably going to list it myself. So, if I can get the buyers and save some money... But I'm tempted to consider using a local realtor. The MLS might be different than the local one, and I might assume a local realtor who's any good would have a better handle on the prices." Is that the end of it?
Steven:Yeah.
Jill:So, do you want to go first?
Steven:Congratulations. This is working for you. I'm really, really glad. I mean it, you're going to get through this first deal. It's going to be a lot easier. You're going to look back on it and say, "Wow, I learned a lot and I can't wait for the second one." Just like your first marriage. So...
Jill:Why do you do...?
Steven:I do it to annoy you.
Jill:Just poking me all day long. Does this happen to you? Poke, poke, poke.
Steven:It didn't bother you. If you just sailed right through it and didn't listen to anything I said, I'd never do it again.
Jill:Because clearly you don't want to get a rise out of me.
Steven:Here's a couple technical things, and a lot of people in our group in Discord commented the same way. Price per acre on small properties... We take a one acre property and it's priced at $10,000. So, it sells for 10,000 and apply that to even an adjoining property that's 10 acres or 40 acres... You can't use that same number. [crosstalk 00:03:27] The higher the acreage number... If it's 40 acres versus one acre, the price per acre's going to be lower. It's called the bottle case theory. When you buy a single bottle of Coca-Cola and then look at the case price, it's always cheaper to buy it by the case. It's just a pure economics thing. That's why people who subdivide property for a living make hoards and hoards of money. If you take a 40 acre property and buy it for four grand and, theoretically, divide it into 40 properties and sell it for a thousand dollars each, now you...
Jill:Buy four, sold it for 40.
Steven:I'm grossly oversimplifying it.