Buy and hold land

[Korena Jones]

A friend is considering buying a lot in a gated community and holding on to it in hopes of appreciation. He says that he is able to hold the land and pay HOA fees for 5-7 years. This is a relatively new community in an city that does not have much room to grow. This doesn't sound like it is worth the risk to me for many different reasons. Does anyone think that this is a good idea? If so, why?

[Steve Haight]

@Korena Jones

I buy lots of land and builder inventory. I want to know what I am paying for the lot verses what I can sell it for and when. We always buy wholesale usually 50 cents or less of the value so our equity is already built in. Stay away from speculating, you have no control of the market in the future but you do have control in what you are willing to pay for the lot.

Hope that helps,