02 Sep Why I invest in vacant land…
Let’s talk about land. I love land, because in land you’re not dealing with tenants, toilets, or termites.
There’s virtually no competition, for several reasons. Number one, most people think land is expensive. If you bought a house for a few hundred thousand dollars or something like that you’d probably think the piece of land underneath that house is worth $50,000 or more. Or you have read in the newspaper about Wal-Mart’s paying $20 million for a piece of land to put their next superstore on. Well, while this is true and there are lots of million dollar pieces of land, there are also hundreds of thousands, even millions of low dollar properties available for purchase. These are quality pieces of land just outside of larger cities and into the more rural areas, or just on the outskirts of the metropolitan areas.
Once you look in these areas, you will find more land than you can ever imagine. The truth is that those premier million dollar pieces of land make up only 10% or 20% of available land. That leaves approx. 80% to 90% of the land you NEVER hear about. That is where the money is located. People don’t typically consider these when thinking of investing. These pieces of land are not expensive and you don’t have to be rich to buy them. Yet at the same time, there is a rich and active market for these properties if you just know how to sell them.
The other reason there’s no competition is that most investors go after houses. It’s not that investors think that houses are much better, but they don’t even think of land at all. And the ones who looked at land investments think that land isn’t cash flowing. Now if you stick with me for a little while, later in this Land Manifesto, I will tell you how you can make land cash flow. I’ve made land cash flow several thousand times. I do it every day of the week.
So as I said, most investors just don’t understand land and put it aside. They think it costs too much in property taxes and they just don’t know what to do with it. That pretty much means that if you do focus on land (and you soon will want to) you will in many cases have the field all to yourself. On the contrary, it is very common that in the house investment arena and particularly in the foreclosure, REO (Bank Owned) and short sale fields, dozens, and even hundreds of investors fight over one deal.
People are willing to face huge competitions to get the o.k. from one homeowner to do the short sale. They are willing to attend super competitive foreclosure auctions where they have to come up with hundreds of thousands of dollars within, sometimes 24-hours to secure a house they haven’t even seen. In these areas there is huge competition, lots of knocking on doors, lots of rejection. You have to deal with all these things just to get one deal done, and you have to be fast. However, in the land business, there is virtually no competition.
Am I getting you to open your eyes a little bit to this opportunity?
Great then read on.
But before I continue, I can already hear one question in your mind. Whenever I explain my land system, it is at this point when people ask, “Jack, how come you share these secrets? If land is such a great investment and no one else does what you do, why would you let this secret out and create your own competition? The reason is very simple: since 2002, I have bought over 2,800 properties and sold over 2,700 properties for a total of 5,564 transactions. I have since realized that, even though I have done a multitude of these deals and my investment operations have grown from just me and my wife working on this part-time, nights and weekends and running on all cylinders – to having one, two, five and then ten and even more employees working with us and for us – I have come to the realization that we can’t even come close to reaching the full potential of this business.
I have not been able to touch even a percent, of a percent, of a percent of the people and properties that are available for purchase and resale with this system. There are millions and millions of properties available in the US, and at any given time if even only 1% of them is available to buy using our techniques, we are still talking about hundreds of thousands of properties.
Just to illustrate my point – one of the things people do when they really don’t want their properties anymore is stop paying property taxes. At any given point in time there are between 12 and 15 Million Tax Delinquent Properties in the USA. But as it is, the majority of all of my deals, as well as my students’ deals, did NOT have any outstanding back taxes.