Jack Thursday – 5 Things Your Father Never Told You About Real Estate (LA 1831)

Jack Thursday - 5 Things Your Father Never Told You About Real Estate (LA 1831) Transcript: Steven Jack Butala: Steven and Jill here. Jill K DeWit: Hello. Steven Jack Butala: Welcome to The Land Academy Show, Entertaining Land Investment Talk. I'm Steven Jack Butala. Jill K DeWit: I'm Jill DeWit, broadcasting from the valley of the sun. Steven Jack Butala: Today's Jack Thursday, and I'm going to, and it turns out Jill is also, talk about five things that your father never told you about real estate. Might not be your dad's fault. Maybe times have changed. Those guys never had the data access that we have. So, we're going to talk. There's a lot of things that have changed. I think my dad would've done very, very well in this new information type environment, where you don't have to guess. You have a lot of resources to make the decisions. Before we get into it, let's take a question posted by one of our members on thelandinvestors.com online community. It's free, and don't forget to subscribe on The Land Academy YouTube channel, and comment on the shows you like. Jill K DeWit: You know what's funny? My dad might not have done very well with the data. I have to say that, as you said that about your dad. Knowing my dad, my dad wasn't a data guy. Guess who his data entry person was? Me. Steven Jack Butala: Oh, really? Jill K DeWit: Me. Steven Jack Butala: Actually, that makes sense, Jill. Jill K DeWit: Me. When he got a program early on, I think I was in high school at the time. I want to say early in high school, he got a program to input his flight log, he was a pilot, and put his hours and keep track of it there. I would convert it from the flight. I'm the one that would sit and put in the computer for him. So, yeah. It's kind of funny. Steven Jack Butala: This is going to be a long, interesting, very telling, hopefully funny episode. Jill K DeWit: Exactly. Christian wrote, "I'm buying some farmland that is currently growing soybeans. The seller lives out of state and gets pushed a check once a year from the person farming, for a percentage of the crop sales. Seller says there's no written lease agreement. Does anyone know if there's anything I should be aware of when buying farmland that is being actively farmed? My plan is to let the farmer harvest the soybeans, and then tell him the property is going to be listed for sale. Anything I should include in the purchase agreement? Thanks." Steven Jack Butala: Oh, I have so much to say about this. This could be the greatest situation ever, or it could be a nightmare. Just like a marriage can be the greatest thing ever without a prenup, or it could be a huge nightmare, depending on how it ends, and how it all goes. Or who you're with. So, the general... Here's a conventional- Jill K DeWit: No comment. Steven Jack Butala: A conventional way to do this is, you either would have a land lease or you would have an option agreement, a revenue sharing option agreement. All in writing with notaries and all that stuff that lawyers have looked over. Jill K DeWit: You should have been an attorney by the way, you would make a great attorney. Steven Jack Butala: I know, but I would be mad every day. Jill K DeWit: Oh, that's true. I'm glad you're not an attorney. Steven Jack Butala: Exactly. I can't imagine being a lawyer and just dealing with everybody's anger all day. Jill K DeWit: No. Steven Jack Butala: Instead of all we deal with is successes here. Jill K DeWit: True. Steven Jack Butala: In our entire life, happy stuff happens. Jill K DeWit: That's true. Steven Jack Butala: So, in a perfect world, you've got this agreement and here's why I say this, not because I'm not going to get paid or any of that. Farmland and most real estate that is income generating, is valued on that income stream. So, you would value, if you've been doing this for five years, you would apply a capitalization rate, which doesn't happen as often in farmland as it does, let's say,