What’s your thought/experience/advice on purchasing land?

5 Replies

Hello everyone! I have a couple of questions about investing in land with potentials for future development and I appreciate your insights/advice; 1. Have you ever used raw land as an investment vehicle? What are the cons and pros of owning land in its raw form? 2. Where are the so-called “emerging markets” for raw land? How would you identify those markets? Thanks for sharing your thoughts and experience. Fletch

Unless it is zoned for commercial and the development plans have been approved, I feel the long time it takes to develop ties up your savings.  You got to pay property tax on top.....

hi I'm considering this too for my first deal! in my area i'm looking at a cheap foreclosed lot with a burned out house needing removal. coincidentally I just saw an ad for low (ish) priced custom houses, available for 0 down if you have land. the way I see it, it's just finding numbers that work (thank you Bigger Pockets) can I get the land cheap? how much to have the old house remnants hauled away? if i qualify for the 0 down house (since I would then own the land) what would the monthly payment be? could all this be covered by a renter I'm sure there are lots of ways to make land work, I can't wait to hear more from this thread :)

@Sam Shueh   I think  it really depends..   some of the biggest wealth in the US is generated by path of progress land plays usually the farmer seller to the developer.

but I will give you a few of my personal land plays.

1. 3.5 acres Rohnert Park CA.. when I bought it in early 90s it was unbuildable.. but it sat behind a home depot and I took a calculated risk.. now its been annexed into the city and zoned mixed use residential and sites right next to the Graton casino they built a few years ago.. I paid 27k cash for it back then tax's prop 13 300.00 a year so about 35k is invested.. have it on the market for 3 million had an offer at 2.4 that did not go.. but expecting to sell between that price at 3 million..

2. Option on 117 acres in Hillsboro Oregon.. again farm ground .. I optioned this in 09 for 5.5 million and have paid 1.5 million so far in yearly payments since then.. NO income.. when it comes into the city as residential and commercial we feel we will have a 60 plus million dollar property..  Best use of a few million in cash maybe not.. but nice long term play.

3. Been buying lots in Richmond CA.. these are the cheapest lots in the entire bay area they have doubled in the last 18 months since I bought them.. been buying them for 30 to 40k now selling in the 80 to 100k range.. will either build for retail.. as rent control kind of goofs up the idea of rentals. 

I started my career buying and selling bare land I like it.. especially carrying paper its a easier form of cash flow compared to tenants.. But I know what I am doing and have gotten some pretty smoking deals for many years.. 

But land in the path of progress if you have some cash is not a bad thing.

also I love timber land in the north west.

We bought a 700 acre tree farm in 2000.. for 1.8 mil cash..  sold off 100 acres  10X  10 acre lots for 100 to 120k each.. so the remainder 600 acres we had a basis in that of about 800k.. we logged off over the 15 years of ownership about 500k in NET timber revenue.. Plus hunted and rode our quads on it.. so recreational aspect.. then sold the 600 acres 2 years ago to Stimson lumber for 2.6  million cash..  in my timber days in the 90s we made LOTS of money on land LOTS.