Investing In Land, Here Is My Dilema
I am very interesting in start investing in raw land. As a general manager of a local construction company I have seen first hand the demand for new housing in the area and the new developments that keep pooping up all the time...Here is my dilema. I dont know what is the best way to approcah this matter
Should I concentrate in the existing local subdivisions and target the lots avalaible, especially those of out town owners?
Or will it be better to put my effort in newer subdivisions(at a higher sale price)?
Or will a more speculative approach. investing in bordering land could be the way to go?
My intentions are to grade these lots and resell them.Due to the nature of my job I have developed a vast network of contacts, including developers, City officials, brokers, contractors etc....and can avoid most of the pitfalls(perc and soil conditions, flood plains, unusual grading costs,permits requirements etc....)
Does this sound like a good idea? Can somebody point to me areas to be aware?. I have seen lot prices increase and will like to get www.involved.My capital is limited and I have even considering bird dogging to take advantage of the market conditions, Any advise or suggestions will be greatly appreciated.
Sincerely
Luis O Cintron
**Please See My Profile** 
im not too experienced..all the help i can give ya is to make sure your in the path of growth...
most growth travels at about 1 mile per year...give or take....
if i knew more..id tell ya! haha good luck with your endeavors
~Andrew
Thanks young I will keep that in mind, I am pretty sure that I will concentrate in existing subdivisions, trying to guess the path of growth looks a little too speculative for me
If you purchase land that has already been subdivided and improved ('finished lots"
, you'll obviously pay a higher price but have a turnkey situation. Since you said you want to resell the vacant lots, then I think you would maximize your return by taking a parcel and obtaining all the approvals and permits needed short of constructing houses.
I'd suggest you do some research to identify growth areas--check out the master or comprehensive plans of local governments in your area. "Bordering" is relative. If you get the approvals, that will take some time. What I don't think you'd want to do is get the approvals but have to close on the land with the seller and wait years for demand to increase. Ideally, you'd put the property under purchase contract, get some or all of the approvals and then assign to a builder.
Thanks nancy for your advise. Right now I am more interested in buy parcels (unfinished lots), obtain permits and grade it or level it, I can obtain all necesary permits and grade the lot quite fast, without paying the premiun of a finished lot. As a general manager of a local excavation company I can determined the cost of grading and received a substantial discount in the price.....Now when you mention areas of growth....Do you have any advise about how to conduct my research? What should I be looking for? What areas to target? Will that be building permits issue? I dont want to get involved with developers selling lots and the developing of a unit is not in my mind at least not yet. Thanks for any imput
Also research in the clerk of court or county recorder and see what area is selling. Look especially for areas where builders are buying or own lots near that area. Overflow always occurs. Try calling some real estate agents in areas that interest you and asking what they have for sale and what they have buyers for. The tax deed sales are also a clue. For example, I noticed a pattern in that many counties near me suddently started calling due the tax certificates they held and sending the lots to sale. Since it costs the tax collector money to do that they tend to focus on the ones that are in demand. Find some of those areas, check and see whether it has lots of home - does not have to be subdivisions, then check building permits, also check and see contact absentee owners and try to buy. Then grade the lot and put up a for sale sign.
I tried the strategy earlier this year in an area I thought was slated for growth. Sudenly the property more than tripled.
Also, check the tax collector and look for any area where they suddenly raised the assessed value. By suddenly I mean that for years it stayed the same and suddenly -wham- it jumped 2 or more times the previous assessed value. That means that based on the data they collect after sales and based on the prices the folks paid for lots in the tax year previous they saw a positive growth trend.
Thank you very much for the info. The tips are extremely helpfull. I am in my way to the planning and zoning comission to put to work some of your methods. I will keep you post it
I appraise alot of subdivisions in my market...In my market, if you are buying a lot, about 90% of the time you are buying a finished lot with utilties stubbed and streets in. THe money is going to be in the actual subdivision process or the building process. Take over either of these and you'll make decent profits. I think the margin on buying a lot prior to grading and grading it individually isn't necessarily a high profit area. The developer is generally going to finish grade all of the lots at once and pay a discounted price versus grading one lot at a time.
I'd say find a nice piece of raw land that appears to be in the direction of growth, pay a REASONABLE amount for it...and then begin the subdivision process. This does take much more capital and an extended holding period, but I believe your return will be much greater.