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I remember hearing a story about a wildcatter who, on finally striking it
rich, bought himself a huge ranch in the Texas panhandle. One of his friends came to visit
and, naturally, he couldn't help but gloat over his success.
"Tell, you what," he boasted loudly, "I can get into that truck over there
and
drive ALL DAY LONG and never leave this spread."
"Yeah," his friend drawled, not one to be easily impressed, "I had a truck
like that once."
This story, in turn, reminds me that so many things are dependent on nothing
so much as what we perceive them to be.
For example, we've spent the last 19 years thinking of what we can do to
get more people to buy more land.
We've made zero-down a fact of life;
we've locked in interest at 9% simple, and recently, we've begun a new policy
of giving a warranty deed after you've only made six payments.
So do you know what's the single, most common question I have to deal with?
"What's the catch?"
That's right, we've apparently come up with a way to buy land that's so
much simpler, cheaper and less painful than what you've encountered elsewhere, that a few
people don't really believe it's for real. I'm constantly getting suspicious email asking
"How can you afford to do this?"
This puts us in the rather embarrassing situation of having to let you know
that it's a pretty good deal for us too.
Is there a catch?
If you're expecting acreage on the edge of town, replete
with paved, lighted streets, water and sewer lines, community country club,
swimming pool and civic center, then there is indeed a catch. You don't
get ANY of this stuff. We sell land.
If, on the other hand, you want to live in the country, as opposed to the
suburbs, want to drill your own well into the vast and accessible Roubideux aquifer, enjoy
your privacy, see the stars at night, breathe clean air and do all that with as little
damage to your monthly budget as possible, then I defy you to find a better deal.
How can we AFFORD to offer this? Are you kidding? We're ecstatic over the prospect! It's a
decision we've made 'way back then when we asked ourselves did we want to sell a few
parcels and get a lot of money all at once (eventually, real estate is
notoriously illiquid) or sell a lot of parcels and get a
little money for a long time (starting right now).
It's like this:
SCENARIO NUMBER ONE: Suppose you're in the real estate business and you own a piece of
property, like, let's say Cherry Creek Parcel 83. It fronts on
the black-top, has a nice meadow and a small pond. You decide it's worth
about $16,000. All you have to do is find somebody to pay that, and you
can go out and buy yourself any number of things.
(Oh, by the way, you'll need to find
someone who's already got about half that much to put down, because after losing their
stuffed shirts in the early '80's, the banking industry has shown a
paranoiac aversion to loaning money on anything that doesn't include a home
they can foreclose.)
Still, you're only one buyer away from being able
trade for a newer car, make a down payment on a new home or even afford to take Madonna
out to dinner Saturday night.
You put out your advertising, you cultivate your contacts,
you play a lot of golf with a lot of people you can't stand,
and you wait.
Or...
SCENARIO NUMBER TWO: You're NOT in the real estate business (See, things are getting
better all the time!) but you do own a piece of rural property
like Cherry Creek Parcel 83. You determine that similar properties are
selling for around $16,000, but not being in the business, you have notably
fewer opportunities to sell your property.
You try offering it to your
neighbors, but a. They already have land, and b. They all suddenly develop
photographic memories of what land sold for in the 1930's.
You could put
out your own advertising, if you knew where the best places were, but with only the one
parcel of land, you can't really afford to advertise broadly enough to find a buyer, so
you list it with an agent.
The agent's not a bad guy, but he's got to be able to pay for
all that national advertising, he has to keep up to speed on all the
latest arcane real estate laws that have been enacted to replace all the old
arcane real estate laws, and he has to take time out from doing the things
he really wants to do to cultivate his connections.
Naturally, he's going to charge 10% of
the sale price as his commission, and by the time he drags a reasonably warm body into his
office to buy your property, believe me, he's earned it.
When the property sells, you get
a little under $14,400. You can still trade up to that same new car (only with cloth
upholstery) still make a down payment on a (somewhat smaller) new home or still take
Madonna out to dinner Saturday night (just don't expect her to speak to a cheapskate like
you).
Or...
YOU'RE US: You do this all day, every day. You started doing this back in the early 80's
when the banks started charging 18% interest. You saw it as an opportunity. You've sold
over 700 parcels of land like this. You get a nice warm, fuzzy feeling over the fact that
you have lots of relatively small amounts of money coming in steadily. You get
$165 per
month out of the property. That about clears the cost of one of your (smaller) magazine
ads. Maybe you don't get to trade up to a newer car, but you can fill up the tank with
brand-new gasoline. You don't get to make a down payment on a new house, but it's a little
easier to make the payment on the one you've already got. Madonna would probably call the cops if
you even sent her a fan letter, but then, you're not a fan anyway.
It all works out in the
end.
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