Control Of Raw Land For Future Infill Investing
I am staring out of the window at the Calif. Real Estate Scene. The weather is normal. Good and Bad, Sunny followed by Rain. Tiny little earth tremors, snarled traffic and our new Governor will give diction lessons to all the native born. Yes another day in LaLa land
The requirement for Housing fashioned out of shipping containers continues unabated. After all we need housing that is: Earthquake Proof, Termite Proof, Bullet proof, Fire proof and must of course due to heavy flooding. Float!
Is all this symptomatic of a turning market or merely an indication of an increased lunge for the stars?
I have been wandering the area of Los Angeles County. Good areas, bad areas. Very Suburban and some impacted by commercial, multiple dwellings and junk yards.
My search is for raw land, encumbered with little other then weeds and an occasional Coke Bottle or Beer Can.
I would like single lots surrounded by tract houses. I will take the single house on two lots. Buy, then sell the house, keeping the lot which is vacant. I wish to build an inventory of lots.
Where possible I buy the lots if they are far enough below the present retail market. Of course I also try to make purchases with as little cash as possible.
For instance I may try and get the buyer to come back with long term financing and full subordination of their note to allow future construction financing. I may in many instances overpay for the lot in exchange for a note coming back at no interest, all monthly payments to apply on the increased principle balance.
I may bargain a 99 year lease monthly payments only no principal reduction and options to purchase scattered over the life of the lease. Name your type of paper and I am sure I will use it in these purchases of land. Trying to fullfill the requirements of those who are offering to sell and, looking forward to my requirements at time of future lease and or sale.
I need a great many lots and I have arranged with some investment companies to participate in this endeavor. After all it is a repeat as to what happened in England back in Elizebeths time. Only difference is I don't wear a crown or been admitted to holy orders.
I see no reason we cannot do the same here in these Semi United States.
The need for lots is caused by my desire to create Low Cost Housing without creating an ongoing slum. I think the answer is infill, building these Container houses in and among existing tract houses and suburban single family developments. This does prevent the creation of a slum or a "Projects".
Of course this is merely the beginning. I would like to utilize Los Angeles County with its mix of races, creeds and ethnicity, an area in which to learn and correct mistakes in judgement, application and construction. Then spread out to most of the cities of the United States.
To that end there is a need for lots and of course there is a profit to be obtained in buying lots cheaply and then holding them and leasing the lots long term as we erect upon them a container house.
Supose that all the scattered members of TCI each went out and bargained some owner of land into the dirt, price wise and payment wise. Made deals that called for no payments until completion of construction. That called for no interest on Seller take back mortgages merely principal payments scattered over 40 years to achieve an interesting yield. With periodic times set for purchase in full.
Would certainly allow all of the members of TCI to go out of the box as to how to buy and how to pay. Would give those among us who are below poverty level, a starting point on which to initiate the slow steady climb to solvency and all thru control of infill lots in their area of residency.
"Under all is the land, the basis of true wealth."
If this is of interest, I will post a list of the various methods used to buy raw land with no money, little money, lots of money. Subordinated Mortgages, Partial Subordinated Mortgages, Contracts of participatiion etc. etc.
I am sure as each of us walk around our areas we will see vacant lots. Given up on by their owners, been a fire and the house was burned down, or the builder of the tract just ran out of steam and stopped with some lots still vacant. Perfect for a Low Cost House so modern in design and execution that you would think Frank Gehry or da Mies were involved in its creation. Of course the thought of a profit for your efforts never crossed my mind. But it is there.
Most of the heavy increase in prices is in finished dwellings. The price of raw land does not seem to have kept step. So now may be the time to buy. I know I am and I ask how about all of you? Does the thought of a profit on a piece of land in whose purchase you have not used money but Negotiation inspire you to act? I hope so. Gather some of the stuff of nature. Mark well where you buy cause we are going to need an awful lot of lots. Every portfolio should have a few lots scattered amidst the High Rise apartment houses, Shopping Centers and Pied a Tiers.
Lucius
The planner in me applauds your effort to attempt to interupt the monotony of SFH suburbs & garden-style apartments with infill housing that is affordable and unique. This is my goal once I get enough experience and equity in my town. Good luck and let us know the results.
Lucius:
I would be very interested in hearing about different methods for buying raw land, especially with no or little money!
Thank you.
David
this, my friend, is the barrier between me and mucho philly land. i find it all over the place, i just don't understand the 99-year lease and some of other jargon you used. once i get comfy enough in it, i'll be all over it.
please do enlighten me (us) to the best way to approach a single owner as well as an RDA-type suit, so i can most effectively get this done.
I am also interested. How it works?
Hi thar all you Investors. I would start to Post tonight but it is late and I must be up early tomorrow at 0430 to look at a house that actualy tried to change zip codes. It is a hillside and the weather is a little freeky and the heavy flooding seems to have underminded a Cassion have a feeling that the originating contractor shorted it a bit on proper depth. They say they can see the bottom of it at about 5 feet. Yip.
Owner says she is never going inside again. I would like to buy it as soon as I see that cassion bottom.
I will return about 8PM and will come on line and list all the classic ways to trade paper for property and still be able to finance your future development of the property. I find it sneeky but Queen Eliz back in England started it and pretty well financed the crown from that point on. Also the church, they do the same thing. Big thing in England is looking for Free Hold Land. Cause most of the goodies are Church or Crown and that dear friends I am trying to put to use out here in LaLa land. So far 53 lots. I only need about 2,700 more. Oh well, fun to try. I am open to suggestions so as I post you correct and add to my original thinking. I want to learn.
Lucius
Yeah me too! I'm very interested in hearing this. thanks
I have posted one transaction in which the owner does not want to sell. Unless he can get top top market. I cannot do this as my need for infill lots is ongoing and I must husband capital. There are others.
One: Lot is owned by bank. Taken in forclosure with five others. Builder scamed the bank. Talked them into a full payment one time instead of a five payment plan. Then dumped the lots. The bank is in at $15,000
I offered $20,000 if bank will lease me property for 50 years with option to buy at $20,000. Described to bank the asset it would gain owning raw land that was producing income. Income $50 a month for 50 years this equals $30,000. Option to purchase for $20,000. Looks good on a balance sheet bankers view. They agree if they can make the construction/takeout loan of $56,000, 7.3% int payable $375 a mo for 30 years no prepay penalty. Builder, us agree. Our profit on construction and sale is $24,000. Plus new owner pays taxes of course and $100 a month on sandwich landlease to builder. After paying landlease the Builder has a monthly profit of $50 a month. At end of 30 years or sooner owner can buy out lease for $20,000.
(On todays) market owner could refinance after one year, combine all the loans into one loan of about $78,000 6.5% int 30 years pay $490.36 and own the land Fee Simple.
The variations can be played and arranged as you the Developer/Builder wish. Interesting situation on taxes. The secret of course is negotiation. Here you need your street smarts and that dear friends is not learned out of books and texts.
Good luck and strong Negotiations
Lucius
The money to be made on land in my area is in buying a parcel then subdividing into 2 or more -- not in buying individual, isolated building lots or even parcels with houses where the house can be demo'd. The demand for turnkey lots has driven the price up of these to strictly "retail" levels, and the numbers just don't work.
Please do tell more. I am all about urban infill/ affordable/ prefabricated housing and am presently trying to understand how to do precisely that in my area (Brooklyn, NY). How to acquire the land is the trickiest part and where my learning curve needs to be the sharpest. Please explain in more detail some of your deals - I want to learn!
Hate to post another "me too" but sure I would be interesting in getting some more info on this. As with others little out of pocket would be best.
andyj
and.."me too"
by the way Lucius, fallowing advise re/ broker lic.
Sure, I would like to be a part of the "solamente merenge" to. Take the fog out, how does it realy work? Do you give us a money to buy the land you like for you and then you are the owner and we just do run hopping to make buck or two? How does it work? Can't figure it out!