By Jack Bosch
If you have even a passing interest in real estate, you’ve undoubtedly heard one or more of the so-called “experts” advising against buying undeveloped land. Why? Pick any of these reasons:
- It generates no income
- Land is Risky and speculative
- Land is Expensive and you have to be Rich to deal in the Land area.
- Land is a long term game…
My answer to that: “WRONG”!!!
Actually they are correct for SOME pieces of land but as most “stereotypes” they are not true for all pieces of land.
The fact is that the people preaching not to invest in land either don’t know the full story or are not telling you the whole truth about raw land. There happens to be another school of thought entirely. And once you take notice and begin to analyze things clearly, you’ll start to see that buying land can actually be a tremendous wealth builder, one that can generate a great monthly cash flow with very little risk.
Let’s think about this for a moment. For literally hundreds of years, vast fortunes have been made in America by owning land. This has occurred in one of two basic ways: Either the owner held land that lay in the pathway of progress and growth, or the owner held land that someone else wanted to buy in order to change how it was being used. (Remember when the Disney Corporation bought large tracts of undeveloped lands way outside the then borders of Orlando?) These same basic premises work just as well today. Owning a well-positioned tract of land can return many, MANY times the amount of money invested in it, but that strategy would be indeed a very long term strategy. Waiting for the city to come in and develop your land can take a long time.
But, aside from just buying low or in a growing area and selling the property for cash years later there is a whole other world that most investors overlook.
People for the most part usually understand that money can be made in real estate, most people even know someone that has made it big in real estate. And they do understand how they can make money in Land. But how can you make money in Land FAST, with little risk and without dealing with banks? And even more important, how can you make Land Cash flow?
And that is exactly what we are going to talk about in the AZREIA meeting in Phoenix on Tuesday, February 14th and in Tucson on February 15th.
Since undeveloped land has nothing on it most people think that they will have to build a house or apartment complex on it before they can receive a monthly income stream from it. Yet people always look at me as if I am from a different planet when I tell them that for years now I have been receiving a lot of cash and a very nice cash flow from my properties.
What’s the secret? Well while every other land investor in this county is either developing the land or holding on to it, there is substantial profits to be made by looking at land that is on the outskirts of big cities, in smaller towns and even on rural land. And at the end it all comes down to the following.
How cheap can you buy the properties?
I have found out over the course of over 3100 deals in 8 years that there is an entire market segment that is almost completely ignored by the masses of investors yet that has huge profit potentials, while at the same time avoiding most of the risks that come with traditional real estate investments.
Plus by going after these properties there is often (when doing it the right way) the potential to get these properties WAY under market, and therefore not even having to go and get another mortgage. How much below market? I am talking about buying them for 5-25 cents on the dollar directly from the owners (not via Tax Liens or Tax Deeds).
With prices like this (sometimes as little as $100 to $2000 per property) most people can even afford buying these properties in their IRAs.
In addition, because it is land you don’t deal with most of the typical complexities of Real Estate Investing like:
- Rehabs (and it’s cost overruns)
- And Termites
With land as I described it you can stay away from all of that and literally simplify real estate investing to the bare essentials. Dealing with a seller when you buy and dealing with a buyer when you sell. Other than that there is not much to do. And you might be surprised by just how many people are looking for land just like that. Baby Boomers are realizing they can’t retire “in style”. People are moving away from the high cost areas into the outskirts of towns and rural areas where the cost of living is more reasonable.
Focusing on Land just outside the major metropolitan areas and more rural areas takes advantage of exactly that trend. And when you buy for 5-25 cents on the dollar, really selling is barely a concern.
I am looking forward to seeing you on February 14, 2011 in Phoenix and February 15 in Tucson to share much more about this concept and how it has created wealth for me, my family and hundreds of investors around the country in the last years.