Open up almost any real estate investing book that’s about buying raw land and you’ll be told that you should never purchase land without seeing it in person first. Buying land without doing lots of in-person tests and homework is called foolish.
This is exactly the rule I broke when I first got started in raw land investing for my real estate investing portfolio. And I made a killing.
One day I woke up and said, “Wait a minute.” All these big-time real estate land investment gurus are saying to never buy land without doing this and that, but they are buying land parcels worth millions—or least raw land that’s worth a considerable amount of money.
I wondered if I really needed to spend thousands of dollars to inspect cheap land that I wanted to buy and sell—I have an upcoming book that will detail how I made money doing this.
Could you buy cheap land by doing some basic at-home research and live to tell about it? Certainly, there are some risks—such as buying land with environmental issues.
I decided that it was time to unleash my inner financial rebel and take a gamble. I purchased some cheap land in another state without inspecting it in person first. I was on pins and needles the whole time.
A few months later, I sold my land investment to someone else for nearly double what I paid for it. Despite this rule that I broke, I had succeeded. I went on to purchase more land this way, and I made more outstanding profits.
But, here’s an important note. When I used this method, I purchased cheap land. I’m talking about so cheap that you won’t need to take out a loan. Now, when I do more substantial real estate investments, I don’t break this rule.
So many people out there, perhaps even you, believe that you need a small fortune, perfect credit, and luck to invest and profit in real estate.
When I got my start in raw land investing, I used my business sense to help make the initial moves—supply and demand. I started with a small investment—money I was ready to lose.
My most recent land sale netted me a profit of over 500%.
The point of this article is to illustrate how you need to scale financial advice to your own situation. Sure, Donald Trump might never buy raw land without seeing it, but have you ever heard about him buying cheap land? Are you going to buy real estate near his level? If not, you need to scale down the advice some.
There are many ways to make money in real estate and that’s why no one person is a certifiable all-around guru. It’s impossible to be involved with everything at every financial level.
My name is Jason A. Martin. I'm an investor/trader and financial writer. This is my blog. I also run a site dedicated to currency trading at CapitalistNation.com. If you'd like to follow me on twitter, here's the link: Jason A. Martin If you need financial content (articles, newsletters, eBooks, etc) for your site, publication and/or business, go to FinancialWriter.org (my service) for more details.
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My name is Jason A. Martin and this is my investment blog. Back in Jr. High School I fell in love with an electrical wiring company's stock on Wall Street. After following the stock daily in the papers—the Internet wasn't around back then—I sent them a letter and they sent me back all sorts of wonderful information about their company.
In High School, we had a stock market contest. All the kids were picking companies that made stuff they consumed. When I announced my beloved company, I was laughed at. Little did they know that my company was going to be the subject of a takeover soon.
Long story short, I won the contest and have made money in the stock market, through real estate investing, currency trading and so forth.
I hope you enjoy Financial Rebel. If you do, please leave your comments and share this site with those you know. I also run a currency trading blog over at CapitalistNation.com.
Jason
4 Comments
Any more info or pointers on what to look for in raw land?
Crystal
5/8/2009
Jason:
These are some great tips for land investing, that are still true today! I guess you would agree that particularly in this time of tight credit, your recommendation to start small so you don’t need a loan is very valuable.
Cheers,
Thomas
http://Landprofit-Formula.com/blog
Thomas Bartke
11/3/2009
Jason, Crystal et al. -
Tramping across a piece of raw land is a lot of fun for me, but I start with checking on timber and mineral rights and giving each piece a once-over with Bing Birdseye and Google Earth beforhand. Many County assessor office sites have aerials with the property boundaries already in overlay form.
store.usgs.gov has digital topos that you can download for free to overlay on the Google Earth image, too. A free toolbar lets you get latitude and longitude so that you can find corners via GPS.
Shale gas plays are worth a good $1,000 an acre in lease bonus these days (up to $5,000/a for parcels above 300 acres), and good timber brings similar amounts. Consider them in the calc of what’s “cheap” if the rights come with the land. You can find gas shale area maps (Marcellus, Utica, Fayetteville, etc.) on the Internet quite easily. Timber has to be seen – by you or a professional forester.
Many of the cheapest properties you’ll find have conservation easements. Some of them don’t allow anything more than walking on them: no ORV’s, hunting, logging, roads or construction allowed. It won’t turn over easily. The right land is fun and very profitable, but do the research!
Enjoy the great outdoors!
Tally
Tally
6/14/2010
If you were to buy land with cash from anyone you increase your chances of getting a good deal. It’s also a sure thing you’ll pay more when you choose a payment plan. But if you’re looking for low-cost, off-grid property to park a tiny house and don’t have the cash, paying the premium to have a place to live while making payments may be a good deal in the greater scheme of things.
dubai property
8/20/2010
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