Investors land in the path of progress for diversification

[Jay Hinrichs]

AS we all get focused on one or two types of Investment properties  IE  cash flow is the only thing to invest in or buying for appreciation is better or the combination of both..  However for truly passive long term wealth I feel that searching out those path of progress properties  and either paying cash for them or financing them can lead the sharp investor to massive wealth and returns without ANY other involvement other than stroking a check annually for tax's and maybe hiring a farmer to keep the grass mowed..

example is one I close yesterday  37 acres the family bought 27 years ago for 199k  .. we closed on it yesterday for 7.2 million cash to them.. they did not even 1031  just going to pay the tax and call it a day.. 

now I don't know if 199k invested in say a few rental houses over 20 or 30 year run would equate to an exit like this.. but for this family it cant get any more passive.  

I have also seen this with Timberland Holders as well.. HUGE gains with no real work on the property.. they use it to hunt and fish and ride quads etc.. so personal enjoyment while those trees just keep growing.

seems like a nice diversification to ones long term retirement strategy..   And one we have implemented ourselves.. we have a path of progress property in Sonoma county ( Rohnert Park ) that just got brought into the city.. we paid under 30k for it 25 years ago and value today is about 3mil.. and we have another big play in Hillsboro Oregon 117 acres we optioned for 5.5 mil in the bottom of the recession of 09.. once brought in to the city this would be worth way north of 50 million.. So if it is not something that I will partake in at my age my heirs are going to be very happy.. and collage will be paid for all the grandkids..  

Just some thoughts for all you investors who are sharp and may be able to identify areas were towns will Have to grow.. the biggest money I see made is the farmers selling to us the developers.. at least biggest money with basically little to no work and Risk is just time.

[Richard Sherman]

@Jay Hinrichs We have to get lunch sometime (I am buying). Willamina is my neck of the woods.  I grew up down in Jefferson and have seen most of the corn and mint fields turn into houses for commuters to Salem and Portland. 

 We split off 11 acres of the 72 acres I talked about above (Eola-Amity AVA, surrounded by vineyards, 1 mile from Hyw 99) and got the old homestead building permit renewed and approved for a home site, sold that 11 acres for $370k...we paid 325k for the whole 72 under 4 years ago (like you said, cash, was in an estate, had to close in 10 days, no inspections etc.)  The remaining 60 will go for between 10-14k and acre (so around $600,000 and $800,000k to either a vineyard or a conservation group to protect the oaks.

This is small change compared to what you are talking about but opened my eyes for value.  We took some of that money and bought 100 acres with water rights and a lake off Red Prairie (between Sheridan and Dallas OR).  Working on getting the lots combined to get a house approved (80 Acre EFU) clear the brush and sell it I think after we fix up the outbuildings.  Good place for our cattle herd while we do the work too.  

You are right though, the investment is for the big pay offs, cash flow sucks in the meantime haha.  BUt timber or Ag reduced taxes make it much better than speculating on lots.