How to Find Land By Bill Roberts
Man has always had the urge to find new lands. It is what led to the discovery of the New World. It is what pushed us west from the Eastern Seaboard.
But just because all the land has been discovered doesn’t mean that our thirst for new lands has been quenched. On the contrary, we seem even more inspired to find a piece of land that satisfies certain hungers within.
I’m one of those land pioneers. I like nothing more than going out into the sticks looking for that elusive parcel which will satisfy a hunger deep within me.
Let me first say that I do this as part of my job. I help people make retirement plans. I utilize land to maximize their returns on their retirement funds. See my post on Land Banking for a fuller explanation.
So how do I go about finding those special parcels? In the first place I believe that all land is good. “I never met a lot I didn’t like.”
But we want something special for our retirement account. We are planning on retiring in ten years, so we want something that will appreciate significantly in that time frame.
For a long term hold we could buy marginal land. It will appreciate, but probably not enough in the next ten years to work for us. We need something that will grow significantly over the next ten years. We need good land.
Finding Good Land
OK, how do we do that? Well, I’ll tell you what I do. I read everything I can get my hands on regarding TRENDS in the real estate market. I want to get there first before the land rush begins.
Then I drive around my target area. I get a “feel” for how development is going to happen. It ain’t rocket science but it is scientific.
Growth “happens” along arteries (roads, rivers, etc.) and near population centers, so I’m particularly interested in land in close proximity to these arteries and centers.
A Word About Prices
I have no preconceived ideas about value. Once I find an area that I’m interested in I begin to “educate” myself on land values there. Remember, real estate prices are very subjective. It is a matter of what everybody thinks rather than some absolute yardstick.
The local people already “know” what I have just discovered. This area is going to grow. They have factored that in to their prices. I need to determine if I can live with these prices. I’m anticipating growth. After that growth the land will have a certain value (based on what it can be used for and what the NOI will be for that use). I will pay a bit of a premium for good land but I’m not going to give them all my profits from owning this land.
Generally speaking, I will pay the asking price if it is reasonable. If it’s not reasonable I may try one offer at the right price, but if it is rejected or countered I move on. I don’t want to deal with unreasonable people. It just leads to grief.
If you are ready to incorporate land into your self-directed IRA retirement plan or if you would like more information on getting started in land investment for retirement planning or setting up your self-directed Roth IRA, call Bill Roberts (619) 244-4610.