Land Geek Round Table Discussion: Is the Option Strategy Still Effective?

Hey, it's Mark Podolski, the land geek with your favorite niche real estate website, www.thelandgeek.com. and on this week's roundtable, we've got the usual suspects. We've got the nightcap OG dude, buddy. Scott Bossman. How are you?

Great, Mark, how are you?

Good to see you. We've got your partner in crime. Breathe in the mailing, breathe out the marketing. The Zen master. He's wicked smart. Mike Zaino. How are you? I'm doing good.

Great to be here.

Good. Good to see you. We've got the most feared woman in the country, the terrorist hunter, Mimi Schmidt. Mimi, how are you?

I'm doing well. How are you?

Good. Good to see you. We've got the technician, Eric Peterson. Eric, how are things with you?

I'm good.

Living the quarantined life.

What does that even mean?

It's no different other than my kids are home from school.

Yeah, it's really no different for, like.

Same place to work. I do the same thing and, yeah, it's all good.

Yeah. As Mike Zander would say. Are you playing any more guitar? No. No. And then, of course, we've got. I love it when you call me Big Papa. Tate Litchfield. Tate. How are things with you?

Things are going well, thank you. How about you?

Very, very well. Very well. And last but not least, our flight school Sherpa. You know you love them. Scott Todd. Scott Todd.netlandmoto.com if you're not automating your Craigslist and your Facebook postings, posting domination.com thelandgeek Learn anything about anything. Investor ninjas.com Scott Todd. How are you?

Mark?

I'm great.

How are you?

I'm great. Before we get into our topic, I just want everybody to know that we have a new sponsor. That's the old sponsor. It's flight School. Today's podcast is sponsored by Flight School. If you want to learn more about how the next 16 weeks can literally transform your life, go up the mountain of land investing with all people. Scott Todd, being your Sherpa, then you owe it to yourself. You owe it to your family. You owe it to your community. Dang it. You owe it. You owe it to the world. To learn more, schedule a call with Mike Zane or Scott Bossman. Just go to Langeek.com training. See if this passive income niche is right for you. The next flight school is May 13th. May 13th. So it's coming up before you know it. Scott Todd, you've got a really good topic. What's what's our topic today.

All right, so look, here's the deal. We were contacted by someone who saw some properties on land moto and said that the properties were being listed by a scam seller. Okay. And the deal is we did some investigation and what we determined, it looks like what happened was the person was not a scam seller. It looks like what happened was the person that had actually entered into an option agreement with a seller that expired expired back in December of 2019, but yet they were still listing properties for sale, even though they weren't the technical owner of the property. Right. But they actually had an option to buy the property. And that's what they were doing is they were listing a property that they had an option on, but the option had expired. So the seller was pretty upset that the actual owner, the land owner, was pretty upset that the. That the property was being listed on land moto when in fact, somebody didn't even have a contract to buy it any longer. And it brought up the question or the thought process. One, when I got the story of kind of shocked me as kind of odd because I know that we talk about options. I don't like options. I don't do options. Like, come on, buy the land. We're not talking about that much money. We really are not talking about that much money. Buy the land. So I'm just curious, like, does anybody do options? Am I missing something? And then the follow up to that is, is it legit? Like, should you keep marketing a property even though you don't have it after the option expires? Like, what. What's your take on it?

I feel like we should start with the irascible Eric Peterson, who's probably have really strong opinions about this. Eric, again, please don't curse, but let us know.

Keep it clean. So first of all, the. The end of that question about, you know, is it right to market a property that you don't own or you don't have an option agreement on? Absolutely not. I think that that ad, you know, if it was placed while the option was valid, you know, that's okay. But it should have come down right at the end of that because obviously at that point, they no longer have the right to just sell that property or technically buy it and then sell it. In terms of option agreements, it is something we teach. I think it's something that's somewhat rarely utilized. I have utilized them in the past. Typically when I'm doing that, it's for a more expensive property that I might not want to put all the capital out on right away. Sometimes it's been maybe a property that I'm not super familiar with in an area I'm not super familiar with. And it's also very expensive. And I'm just not willing to put that cash on the line without knowing if I could sell that property. But generally speaking, if the property's in an area that I work in and you know, it's the standard kind of stuff I'm used to, I'm not out there looking for option agreements. I do understand why maybe some people getting started might try to utilize that strategy. But I think you have to be extremely careful with it and you need to be very forthright with your potential buyers and also with your seller. Because here you're acting as an intermediary and you know you've got to buy that property in order to sell it. So there's a lot of kind of finesse that has to happen in a deal like that.

No, I think that's a great answer. You know, it's interesting. Like I haven't talked about options. I haven't thought about options in years. And what's really for. For us that's replaced the option is land arbitration or not arbitration. I'm sorry, land arbitrage. I don't know why I'm thinking about arbitration. They have a. You know why? Because I had a call with my attorney yesterday. So land arbitrage is sort of, if you're limited on capital, that solves that problem because you can control the property for 100 bucks and then you sell it with a higher down payment, let's say 200 bucks, and your term might be a hundred bucks a month, and you sell it for 200 bucks a month and you're making the difference of a hundred bucks a month, only putting in $100, which is like an option. So what do you think that Eric Peterson?

Well, I love land arb. I think it's a great strategy. I think that it can definitely work. Well, it's in the scenario that I was talking about with an option agreement. I don't think it really applies because chances are you're not going to do a land arb deal with the current owner of the property if they're not a land investor. But if you're looking for a way to get started in this business and you're not maybe actively mailing or maybe you just you want to kind of test a market or something, spend a little bit of capital to control a property, then yes, land are makes a lot of sense. And is an excellent strategy.

All right, well, great. Well, you know, let's go to a cooler head than Eric's Mike Zaino. What are your thoughts?

Definitely not a cooler head than Eric's first thought. Well, I look at it from where maybe I would have used an option where I work in a host. I do a lot of wholesale, right? So if I'm talking to you, Mark, and it's like, geez, you know, negotiating a price, and I'm like, ah, you know, Mark, I don't know, but let me do this. Could we get an option on this? Could I, you know, secure this for you for maybe 30, 60 days? I work with a large pool of investors. Let me see if any of them are interested, and if so, you know, we could. We could work together. Then I wouldn't advertise it typically in the sense of. I mean, I could do this actually, if it wasn't even, you know, I could just be talking to you, Mark. Listen, let me see. I have some other investors. See if they'd be interested. Let me get back to you. I don't have to have an official option, but I'm not going to list it on land Moto. But I may go to a pool of buyers that I know very. I know very well. I've done lots of deals with them and say, hey, guys, I got this property here. Are you interested? And if they are interested, then great. I know that I could close and make the deal, the wholesale deal, or I could go back in 30 days. Say, Mark, I've reached out to all my investors, so it could be like a tactic, right?

So maybe you don't do anything.

Maybe just option it and just a dollar or something in 30 days. Geez, Marc, I reached out to all the people I work with. No one's touching at that price. So unfortunately, I can't work with you. But if you're interested in being a little bit more flexible with your pricing, maybe. Maybe I could work with you and maybe I'll get a better deal. So, I mean, I see some use of it. I don't do it a lot, but I see where it could be utilized.

Okay. Would you think it's it's just wrong after that option expires to keep it listed on a platform like Lambota?

Yeah, I wouldn't do that.

No? No.

I mean, I may say, geez, you and I might be talking now. You're on the other side. You're one of the people that buys from me. And like, you know, I wish I had a Property in Costilla.

Right.

And I'd be like, you know what I mean? You know, Mark, I might be able to get you something, you know, and that's already expired, but I'll go back and rekindle the deal. But not going to advertise it on a platform. No, not myself.

Okay, cool, cool. Let's talk to the most feared woman in the country, Mimi Schmidt.

So no, I would definitely not be advertising a property after an option has expired. I don't use options. I don't use them at all. I do market properties that I don't own though.

But.

I do it kind of, I pre sell them. Right. So if I already have an agreement that I'm buying the property and it's already gone to closing, my VA is creating the paperwork and then I see nothing wrong with my another VA creating the marketing materials and us getting those, those properties up on the marketing platforms and actually looking to sell them before. You know, how many weeks does it take for somebody return the paperwork after you send it out, have it created and send it out? One, two a month. Right. So I could be marketing properties that I don't own as they're closing. So I do it that, but I don't option properties per se.

Okay. I mean, has a potential buyer ever come back to you and be like, hey Mimi, I went to the county and you don't own this property. What gives?

I tell them it's in my pipeline. The paperwork's basically out for signing and it's just a matter of time. And then a lot of times these counties run behind. You know, some of these counties websites run nine months behind on their information. So there are properties that I actually do own that people call the county and say it looks like you don't own it. And I can say, yes, I do. The county's data is just not up to date.

Does it ever happen that scenario? No, no.

The ones that I own, yes. On counties that don't update their data. But me pre selling properties down.

Wow. I'm kind of shocked. That's great. That's great. Let's talk to the nightcap og. Sober as always. Scott Bossman, as always.

Yes. I currently do not use option agreements. I did employ this strategy early on in the first year of the business. I did do a couple options. One, nothing became of it. I think I paid the lady $50 and we had a 90 day option. Just decided that I didn't want that property in the end. The other deal was similar to what Eric said when I was first Starting I didn't have the capital to buy this more expensive property. So I was just forthcoming with the seller and said, you know, listen, if. Oh, Andy had back taxes. So. So listen, I don't want to invest all my money in this deal right now, but if you're okay with it, I'll try to market the property and try to find a buyer for you. And I. And I did find a buyer, but I was very, very forthcoming with that. To me, I don't know, the option agreement, it could be a little shady to a seller. So I just make sure I'm very forthcoming, tell them exactly what I'm doing. I don't utilize that strategy anymore. You know, as I've mentioned before, five years ago, we didn't talk about land arbitration as much. We didn't talk about selling notes as much. So there's ways to move forward in the business with, you know, ways to make your money work for you. As far as the second part of the question goes. No, absolutely not. I would not. I would not be posting a property on a public platform that I do not own, making it appear that I own it.

Exactly, exactly, Big papa.

Yeah, I mean, posting a property that you don't have the rights to sell, that's sleazy.

That's.

Do you like options, though? Would you do an option?

You know, I don't. I'll be honest, I've never done an option because I either believe in the property enough to either buy it or I'm not going to touch it. So it's either one or the other. And I trust my due diligence, I trust my county research, my ability to conduct that. And if the numbers make sense, you gotta buy it. Right. There's no reason not to buy it. And, you know, that's just me personally. I can see where it might be a good avenue to take if you're buying an expensive property. But I don't buy expensive properties. So most of my properties are under $2,000. So I can typically just write a check and buy it and take full possession of it. And that's my preferred method. But selling something you don't own or have the rights to sell, that's not okay. And that. That gives us a bad name. Right. Then it takes one person to have that experience, and then they assume that all land sellers are kind of acting in a gray area, marketing stuff that they shouldn't, etc. So, yeah, I'm not a big fan of the option, and I don't. Here's the other reason Why I don't love it is for me personally, it's hard to get super motivated to sell a property that I've got an option on for $25, right. If I'm going to sell something, I need to have some skin in the game, right. I need to have a commitment, and I'm motivated by that thought of wasting money. If I sign up for a program, I'm going to get every single dollar out of it every single month. Like zapier, I'm using every single zap that I pay for regardless of if I need them, right? Because I'm cheap like that. So for me, if I'm spending money on something, it needs to be a lot of money in order to kind of really get me to take the action necessary to get the end result I want.

Yeah, no, absolutely. And, you know, we haven't really brought it up, but even on a bulk deal, I'd rather do a takedown deal, contractually, where I'm going to say every month, I'm going to buy these two lots at this strike price. And then that kind of mitigates my risk as well, because if the market changes, I'm only into it for those two lots per month and I can get out of it as opposed to an option. So, Scott, Todd, how do you like those answers with. What'd you think?

Well, I mean, I like the answers. I mean, I'm the same way. When I got going, I tried the option once, literally once, and I fumbled through the explanation because I said to the guy, well, look, I can't buy it, but why don't I option? He's like, well, what's that? I'm like, oh, well, you give me the right to buy the property within the next 90 days, and I'll give you a token amount. It was so I. I didn't have my wording right. The guy's like, well, just send me the paperwork. I never heard from the guy. And I'm like, this is just too much. I'm either gonna buy it or I'm not gonna buy it. And so when I mail, like, literally when I mail, then I actually close. And sometimes, like, that has been a key conversation to people when they'll call me and they'll say, well, you know, I got an offer from this other guy for $3,000, and your offer's 2,300. Why would I accept yours? And I'm like, because I have the money and I will buy the property, period, in the store. The other guy doesn't have any Money. And he's not gonna buy the property. Like, that's the difference. I'm gonna close. And I've actually had people turn around and say, no, I'm gonna take the $3,000 route. And I've literally seen people go onto the Facebook group and say, hey, I got this property. I got it listed for 3,000, you know, but I don't have $3,000. Anybody wanna buy it for me for 350, you know, 3,500 or. And I'm like, the guy doesn't have any money. And so of course I'm not pitching in to help. I want him to. In that case where he stole a deal from me, I want him to feel the pain because, like, you either going to show up and get the deal done or not, but if you don't, if you can't do it, well, then don't tell someone. In my opinion, don't tell someone. I'm going to try to do it in six months. And then you shop in the market, because I think. And then leave it up on a website, like, take it down, because I think that you're making bad. You're giving other land sellers a bad rep, like, close on it, get it done. Be an action taker, be an executor, be a deal maker and close. Buy the properties or go to land. Arm Tate.

Yeah, no, well put. I completely agreeing with that. We close deals fast. We close them frequently. And I hate it when people, you know, offer more than us and then strings, string a seller along. I mean, it's just do the deal if you're going to do it.

Yeah, Mimi, completely agree.

Zen master.

Yeah, I think we just crossed over into a new subject with some great insight from what Scott was saying. I mean, this is. If someone says, geez, I got to. Because a lot of times, you know, people might say that just to kind of rattle you and see if you'll come up in your price. Like, oh, I got this other, you know, it's like great, you know, but in our experience, you know, you probably end up signing with them and then after a little bit, they'll try to negotiate with you. And like, all I can say is that every doll that we offered you is every dollar you're gonna get. You know, this is, you know, and so I think we kind of crossed over to a new subject now with some great insight.

But yeah, that could be. That could be a new roundtable topic as well. Just closing with a seller when they have multiple offers. Eric, final words.

Yeah, I mean, I think, you know, don't be a sleazy land seller. Don't go out and list property that you don't have the right to sell.

Yeah. Scott Bossman, final word.

No, I think we're all on the same page. We don't want to be portrayed as sleazy or have people think of us in that way at all. And I think some people do. And so any chance we can get to negate that stigma is a good thing. We hear all the time from people that we interact with. Well, you're just a sleazy land seller. Well, no, I'm not. I mean, I'm selling it to you for market value. I've made this property become available. I don't know, it's just kind of interesting. So. So, yeah, I think reputation is key, and we need to. We need to keep that in mind.

Yeah. I mean, if anybody ever called me a sleazy land seller, I'd just call them Carole Baskin.

Right.

And I'd be like, look, no, not at all. I'm providing value here. But, you know, to put it all full circle, from last week's roundtable about the Tiger King, you know, it does sound like that seller Scott Todd. By listing property they don't own after the expiration date, it was a. They're like land exotic. And then the person whistleblowing is their Carole Baskin, is it not?

Maybe.

Maybe.

Is it. Is it a fair comparison?

It could be, but, you know, like, did the whistleblower feed their husband to the tigers? Like, isn't that what makes Carol Baskin. Carol Baskin, supposedly, she fed that. You know, you get it. It's all supposedly hypothetical.

Yeah. I haven't seen the bonus episode yet. I know you did. Is it. Is it worth watching?

Oh, yeah, it was good. I don't. I just don't know that you. You can get away from the nuttiness. Right? Like, sadly, they didn't have Carol on there, but. But because I live in Tampa, you know, where the big cat rescue is. The News did an interview with Carol and her husband. I'm trying to find it on their website now that I can share with you guys, because she is highly offended. I'll tell you what, I'll tell you what. Like, if you. If you want some more entertainment, bonus free bonus episodes, go to the big cat rescues YouTube page where she's posting the daily. Where she does the daily video with the high cool cats and kittens. That kind of a deal. Because she really does do that.

Right?

Like, that's a real deal. And then in the comments, people are lighting her up. You can tell. You can tell she's the one responding. Like, I can read. Like, you can read it.

You.

And she's responding and you know, like, obviously she's deleting someone's like, why was I banned from your Facebook page? By simply asking, what was different between you and Joe? Exotic zoos. And she's going through there explaining it like, it's good reading, man. Like, I don't watch the videos. I just read the comments. Like, isn't that the new face for everything? Just read the comments. It's fantastic.

Yeah. You know what else is fantastic? A Mimi Schmidt tip of the week. So, Mimi, what is your tip of the week? A website, a resource, a book, something else actionable, where the art of passive income listeners can go improve their businesses, improve their lives. What do you got?

This website, it's to small business association.gov and it's about the Economic Injury Disaster Loan program EIDL. It gives directions and information on the application. So what is this loan? It's a loan for small businesses that have been affected by COVID 19. You can get a $10,000 advance. I know land sellers that have already gotten the $10,000 advance. Interest rates 3.75%, and you don't have to start paying on it until a year from now. So if you need some funds, government's offering them.

This is a great tip.

Wow.

Now, I just did my PPP application with my bank, but this is. This is something different, correct?

Yes, the PPP is fairly a little harder to get.

Yeah, this is. This is cool. Great tip. Fantastic. Well, I want to thank the listeners and just remind them the only way that I can get these, you know, cool cats and kittens to come back on the roundtable every. Every week is if you do us three little favors. You got to subscribe, you got a rate, you got to review the podcast. Send us a screenshot of that review to supportlandgeek.com we're gonna send you for free the $97 passive income launch kit course as well as the latest $2.2 million wholetailing course absolutely free. And am trying to get Scott Bossman to get a Joe Exotic mullet going. And we could get the the meme for Scott Bossman land exotic. But the only way we're gonna do that is if you send us the screenshot of your review on the podcast. Otherwise, Scott's not gonna do it.

I got a great start, man. My hair is probably the Longest it's been in 20 years, so I'll just. Challenge accepted.

Yeah. No, my. My. My hair is so thick. Like, I felt like Marge Simpson last night. Like, I'm, like, pulling, like, things out of it. And, like, where'd this corn on the cob come from? Like, insane. It's insane.

So.

Well, thanks, guys. And are we ready to do this? 1, 2, 3. Let freedom.

Freedom.

Not bad. And wash your hands.

Okay, listen, I got it right here. Here's what we got to do. Maybe we need to do a spoof of the tire king. Maybe call it, like, the Land king or something. Or Scott Boston can be land Exotic. Mimi could be Carole Baskin.

Right.

Aaron could be Jeff Low. He could just get his hat. Okay. He could be the stoner dude who was the zoo manager. Right.

The one who smokes while he fills up gas tanks. Yeah, I like it.

Let's see, we got Daniel. I don't know who's Dano? Myself. Or you could be Zano. Could be the documentary host.

No, you know, Zano could be Bhagavan because he's got that whole Zen thing going. Ooh, yeah, Doc Anno.

You could be the Kirkham guy.

Thank you.

Yeah.

I don't know.

You.

You could be Scott Ty could be Howard.

Scott Todd, Are you gonna let.

You gonna.

No.

Scott Boston. I'm coming after you. I could be Don Lewis, though. You all heard it.

You all heard he's coming after me. You all heard on this podcast.

Wow.

Wow.

I mean, Mark, that is the. That is the come after you that you experienced the other day, isn't it?

Yeah. You know, Boston's kind of quiet. Like, when he cuts, he cuts deep. He's like that guy.

Wow.

Yeah, wow.

That's. That's a lot of pent up rage right there.

You now see why Land Exotic ends up in prison.

Just saying. Yeah, absolutely. I mean.

Scott talk would actually be at your doorstep, Scott Bossman, because he just has to get in the plane.

That's right.

I know you all know what'll happen. You all know why I disappear when I do.

Yeah. I mean, Scott, don't. Don't you think Zaino should come to your defense a little quicker, though, considering he's your. Your nightcap. You know why I did.

Little bad blood lately? I don't know.

You know why I didn't, Mark? Because I'm still in shock from the most.

The.

Probably the most severe words I've heard Eric Peterson ever say on here. Don't be a sleazy landowner.

Like it.

I Don't know.

I'm still.

He was pretty harsh back then. That's taken me probably off focus for the rest of the call. I've never heard him say such harsh words.

Oh, I. Yeah, I hear, like, I'll vox. I'm like, eric, you want to do a Facebook Live? And, man, like, I can't repeat what he says. And then eventually it's like, okay, I'll do it for the community. But, like, it is. It's like, I hope my kids are listening to this. You know, Eric, we're joking. Obviously, Eric's not like that at all.

Scott. Todd, how far are you away from going to get a picture with Carol Baskin? Can't you just go up there and get a little selfie?

Okay, so look, I'm pro. I could be there about 30, 35 minutes or so. I could be there.

How are you resisting?

Yeah.

What's taking so long?

Well, okay, so for. So, first, I'm not sure that I want to support. Support her mission there. But second, she did say in one of the videos, one of the videos I watched, she did say that they have installed security cameras at the front gate because all these people want to go and. And, like, take pictures of the gate now that it's so famous. So I could go take a picture and say hi to Carol. I mean, that. That's doable.

Yeah.

A picture of you in front of the gate. That works.

Yeah, that works.

I think that's what you need to do for your drive today, Scott.

I don't know about that, but who knows?

Face Live. You think heard Howard can sue the Netflix creators for, like, literally, like, you've turned the entire world against us while we're in quarantine?

I mean, here's the reality, right? The reality is, is that did, like, did they misrepresent, Right? Like, you could always say, well, okay, well, they. You know, they. They didn't edit it correctly, whatever, but all they did was present. Present information of what people said. They.

They.

She even talked about it, right? Like, they didn't do anything. And you can't. You can't control how people are gonna perceive you in that. Like, the. The directors, the producers, they couldn't control how the people would perceive Carol and her husband. You know, like, they didn't.

Unless they.

I don't know. Even if they lied about it's just not true. I don't know that they could do that, Right? Like, they participated in a show. I'm sure they signed all kinds of releases and everything. So, you know, people just don't like her. Like, that's the problem, is that they just don't like her. And, you know, whether I asked her around, whether or not she supposedly killed her husband or not, who knows? They just don't like her. And you can't.

I'm sorry, Scott, did you say like her or liger?

Oh, I. I think we gotta end on that note. That's like. That's a drop the Maya, the drop, the moment pun right there.

Thank you, Tate.

Thank you.

Well, thanks, everybody. Thanks, dear listener and all you cool cats and kittens out there, stay safe, wash your hands, and hopefully we'll be back to normal, some sort of normalcy very soon. But, you know, we're all in this together and if you ever do need a little lift, I've been loving John Krasinski on YouTube. Sgn. Some good news. Just phenomenal. Just phenomenal. So thanks, everybody.