“You miss 100 percent of the shots you never take, and if you think it’s expensive to hire a professional to do the job, wait until you hire an amateur “ AND “The major fortunes in America have been made in land.”- John D. Rockefeller. ARE YOU READY TO SELL OR PURCHASE YOUR LAND OR COMMERCIAL BUILDING IN PHOENIX, SCOTTSDALE, MARICOPA COUNTY AND PINAL COUNTY, ARIZONA, CLICK HERE AND PLEASE CALL ME. 520-975-5207 or email me walterunger@ccim.net – VIEW ALL OF WALTERS LISTINGS
Discussions of real property investment normally focus on single-family homes, multiple-family dwellings and commercial properties. Land rarely enters into the conversation, even though can often bring higher returns.
Investing In Land
Why choose land over “classic” real estate investments? There are many practical reasons.
Land is usually low-maintenance. You rarely have a tenant, which means you won’t be receiving midnight calls on a Saturday night because of a broken toilet. You also won’t have the aggravation of trying to evict the seemingly-nice couple who refuse to pay rent and have trashed your property. In most cases, you’ll rarely (if ever) have to even visit your property.
The second consideration when investing in land is financing. Getting a loan for any real estate investment can be difficult these days, as financial institutions’ easy money policies died with the recession of the late 2000s. Although it’s often more difficult to obtain financing for land investments than it is for a primary residence – that’s actually a good thing, because it has made seller financing the standard in land sales.
Seller financing is a boon for investors because terms are highly negotiable. Unlike a bank, a seller is likely to consider you a qualified buyer as long as you can prove you have sufficient funds to make the down payment and at least a few monthly installments. They’re often this lenient because they’re motivated to move the property. They’d certainly prefer to receive a lump sum payment, but most are happy just to establish a cash flow if they can’t negotiate payment in full.
Property taxes are another advantage to purchasing vacant land. You’ll only be paying tax on the land itself and not on structures, so your total yearly bill will be substantially lower. Taxes on large parcels can still be a drain, however, so be sure to take property taxes into account when evaluating land as an investment.
Finally, there’s the old Mark Twain adage: “Buy land, they’re not making any more of it.” He may have written that more than a century ago, but it’s just as true as ever.
Cash Flow
A common concern about land is that it can be a cash sinkhole. After all, there is nothing on the land to generate cash flow, so an investor must theoretically pay property taxes each year out of his own pocket. There are several ways to deal with this issue.
The first strategy is to invest in multiple pieces of land instead of just one parcel. A portfolio of land investments should include a number of short-term flip opportunities (such as land purchased in tax sales or from distressed sellers) mixed with longer-term investments. As the short-term investments are sold, some of the revenues can then be set aside to cover the costs of the longer term investments. This strategy is effective, but does require budgeting and discipline.
Another approach involves arbitrage via the Internet. You can purchase properties, and then through sites such as eBay or Craig’s List, you can resell them to small investors by offering financing. You’ll make a profit as long as the money you are bringing in exceeds the amount you are paying to the original seller. Many who follow this strategy find that small buyers often fail to make payments for very long, so their down payment and any installments they do make are pure profit and the property reverts to you and can be sold again.
This concept of land arbitrage seems foreign to some investors, but it is actually the basis of many traditional real property investments. Consider a duplex apartment building. The owner uses rental payments to maintain the property and make mortgage and tax payments, and then pockets the difference as well as any long-term equity. This is simply arbitrage by another name.
Of course, you can always just hold on to the land and pay the yearly costs associated with it. Over time, land scarcity will almost certainly mean your investment will increase in value (as Twain correctly observed).
Timing Your Investment
As with real estate, there are good and bad times to when it comes to knowing how to invest in land. If you had cash on hand, 2009 and 2010 were the best of times because of massive price drops when the recession was in full force. Prices were extremely cheap and it was one of the best buyer’s markets in our lifetime.
Those peak years have passed, but we are still in a strong buyer’s market as the recovery has been erratic at best. There are still plenty of quality land investments available in most areas.
The industry-standard Macromarkets LLC repeat-sales index reports that the aggregate market value of residential land is still down more than 40 percent from values prior to the recession. And the “recovery” now appears to be slowing again, according to a recent Wall Street Journal article reporting that the increase in U.S. aggregate land valuations had dropped from seven to four percent by late 2013. Buying opportunities remain strong.
Finding Properties
There is one crucial consideration when purchasing land. You should have a defined financial justification for your investment. This typically means that you should either receive a substantial discount over valuation, or buy in an area where rapid price increases can reasonably be expected.
Discounted land can typically be found through bankruptcy and property tax delinquency notices. There is plenty of information available on these approaches, so let’s focus a different strategy: estate sales.
When a person dies, their estate is distributed to heirs through trust or probate. Heirs rarely wish to own vacant land, particularly since they are going to have to pay annual property taxes on it. Additionally, estate taxes are due to the IRS within nine months of death. This usually creates extremely motivated sellers, who are receptive to low offers for “unusable” land parcels which will be a financial drain to them.
As an investor, you should contact estate planning attorneys in your area to let them know that you invest in land, and can help them unload any properties they are forced to liquidate. You will probably not see a huge number of deals, but the opportunities that will present themselves will usually be very profitable.
The other possibility is investing in land which you expect to increase in value. There is no easy method for finding those properties, other than searching for areas where impending development or existing restrictions are likely to dramatically force higher prices.
Similar examples are to be found in many downtown metropolitan areas, where redevelopment or reclamation efforts are planned or underway. This type of investment paid off in big ways during the gentrification of many American cities in the 1970s and 1980s and is still a viable strategy today.
Finding land in areas where prices will rapidly increase requires diligence and research. The more attention you pay to political and business developments in the areas you are considering for investment, the bigger your head start over other investors and the more likely you are to find lucrative land investment opportunities.
ARE YOU READY TO SELL OR PURCHASE YOUR LAND OR COMMERCIAL BUILDING IN PHOENIX, SCOTTSDALE, MARICOPA COUNTY AND PINAL COUNTY, ARIZONA, CLICK HERE AND PLEASE CALL ME. 520-975-5207 or email me walterunger@ccim.net
FROM ME:
Phoenix Commercial Real Estate and Investment Real Estate: Investors and Owner / Users need to really know the market today before making a move in owner user Commercial Properties, Investment Properties and land in Phoenix / Maricopa County, Pinal County / Arizona, as the market has a lot of moving parts today. What is going on socio-economically, what is going on demographically, what is going on with location, with competing businesses, with public policy in general — all of these things affect the quality of selling or purchasing your Commercial Properties, Commercial Investment Properties and Commercial and large tracts of Residential Land Therefore, you need a broker, a CCIM (Certified Commercial Investment Member) who is a recognized expert in the commercial and investment real estate industry and who understands Commercial Properties and Investment Properties. I am marketing my listings on Costar, Loop-net CCIM, Kasten Long Commercial Group. I also sold hundreds millions of dollars’ worth of Investment Properties / Owner User Properties in Retail, Office Industrial, Multi-family and Land in Arizona and therefore I am working with brokers, Investors and Developers. I am also a CCIM and through this origination ( www.ccim.com ) I have access to marketing not only in the United States, but also internationalClick here to find out what is a CCIM: https://en.wikipedia.org/wiki/CCIM
PLEASE CALL ME 520-975-5207 OR E-MAIL ME walterunger@ccim.net
ARE YOU READY TO SELL OR PURCHASE YOUR LAND OR COMMERCIAL BUILDING IN PHOENIX, SCOTTSDALE, MARICOPA COUNTY AND PINAL COUNTY, ARIZONA, CLICK HERE AND PLEASE CALL ME. 520-975-5207 or email me walterunger@ccim.net
WEEKLY APARTMENT CLOSING UPDATE THROUGH December 15, 2017 / Phoenix Arizona Metro.
WEEKLY APARTMENT CLOSING UPDATE THROUGH December 8, 2017 / Phoenix Arizona Metro.
WEEKLY APARTMENT CLOSING UPDATE THROUGH December 1, 2017 / Phoenix Arizona Metro.
PHOENIX Industrial Market Statistics Q3 2017
PHOENIX Retail Market Statistics Q3 2017
PHOENIX Office Market Statistics Q3 2017
Timeline of Arizona from 900 BC – 2017
WHY PHOENIX? AMAZING!!! POPULATION IN 1950 – 350 K PEOPLE; “NOW 5 MIL”. – “5TH. BIGGEST CITY IN USA”
DOT – LOOP 202 / SOUTH MOUNTAIN FREEWAY / PHOENIX AZ – UNDER CONSTRUCTION
ARIZONA FACTS – YEAR 1848 TO 2013
- DEMOGRAPHIC FACTS ABOUT MARICOPA COUNTY:
- The average age of the population is 34 years old.
- The health cost index score in this area is 102.1. (100 = national average)
- Here are some of the distributions of commute times for the area: <15 min (22.7%), 15-29 min (36.8%), 30-44 min (25.1%), 45-59 min (8.6%), >60 min (6.8%).
PHOENIX PROJECTED AS NUMBER ONE US HOUSING MARKET FOR 2017
LIST OF ECONOMIC DEVELOPMENT PROJECTS IN PINAL COUNTY, REVISED 2-14-17
Reasons to Consider me for Commercial Referrals – I have the Knowledge and Experience
Click here to View My Listings and Profile
Click here to find out what is a CCIM:
Click here to view my website:
Click her to join my mailing list :
Walter Unger CCIM – walterunger@ccim.net – 1-520-975-5207 – http://walter-unger.com
2016 Official Arizona Visitors Guide
Timeline of Phoenix, Arizona history
Facts of Arizona – year 1848 to 2013
Feel free to contact Walter regarding any of these stories, the current market, distressed commercial real estate opportunities and needs, your property or your Investment Needs for Comercial Properties in Phoenix, Tucson, Arizona.
1-520-975-5207
Check out my professional profile and connect with me on LinkedIn.
Kasten Long Commercial Group tracks all advertised apartment communities, including those advertised by other brokerages. The interactive map shows the location of each community (10+ units) and each location is color coded by the size (number of total units).
Walter Unger CCIM, CCSS, CCLS
I am a successful Commercial / Investment Real Estate Broker in Arizona now for 20 years. If you have any questions about Commercial / Investment Properties in Phoenix or Commercial / Investment Properties in Arizona, I will gladly sit down with you and share my expertise and my professional opinion with you. I am also in this to make money therefore it will be a win-win situation for all of us.
Please reply by e-mail walterunger@ccim.net or call me on my cell 520-975-5207
Walter Unger CCIM
Senior Associate Broker
Kasten Long Commercial Group
5110 N 40th Street, Suite 110
Phoenix , AZ 85018
Direct: 520-975-5207
Fax: 602-865-7461
Reasons to Consider me for Commercial Referrals
Delivering the New Standard of Excellence in Commercial Real Estate
- Commercial Real Estate Scottsdale
- Commercial Real Estate Phoenix
- Commercial Real Estate Arizona
- Commercial Investment Properties Phoenix
- Commercial Investment Properties Scottsdale
- Commercial Investment Properties Arizona
- Land Specialist Arizona
- Arizona Land Specialist
- Land Specialist Phoenix
- Phoenix Land Specialist
- Land For Sale Phoenix
- Land for sale Arizona
- Commercial Properties For Sale Phoenix
- Commercial Real Estate Sales Phoenix
- Commercial Properties Phoenix
- Commercial Properties Arizona
- Commercial Land Specialist Phoenix
- Commercial Land Phoenix
- Multifamily land Phoenix
- Retail Land Phoenix
- Industrial Land Phoenix
- Land Commercial Phoenix
- Land Retail Phoenix
- Land Industrial Phoenix
- Land Multifamily Phoenix
- Industrial Land for sale Phoenix
- Land Industrial
- P
- Investment Real Estate
Disclaimer of Liability
The information in this blog-newsletter is for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this e-newsletter are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided “as is,” with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.