Buying Land

[Precious Thompson]

How do people make money from buying land?

[Franco Vallejos]

In our experience it was easier to pay in full because the biggest problem we had was the time it took to sell. If we couldn't buy the land ourselves I had a friend who would put down the money to pay for the land and then when it sold we'd pay him back with interest. 

Most of the time we would get larger profits selling the land on contract. 

So for example we would buy 30 acres for like 5k. Sell that for 30k over 10 years with 10% interest. That would be a payment of about $400 a month. The first 16-18 payments would go to the money guy then he'd be paid off with interest. After that basically we get a monthly payment for the next 6.5 years. 

One other thing we would notice is that when they decide to build on the land in a couple years you do tend to get a lump some when the pay it off with the construction loan. 

When evaluating land you have to make sure there is some use in it. It has to have access to roads, power, water and sewer/septic. Otherwise it's pretty worthless. If it doesn't you have to buy it really cheap cause your only buyer will be someone who wants to use it recreationally. Hunting, 4 wheelers that kind of stuff. 

One other thing. It takes a while to build up the monthly payments so they are significant. It took a few years of making nothing but now we have lots of residual payments coming in. So be prepared for delayed gratification. 

Hope that helps.