What started you on investing in land?

[John C.]

Just curious if there are any good stories out there...

I'll start -

Around early 1990's still in college and had some time to burn, was browsing books at Tower Records down in Marina Del Rey and saw something like "how to buy government land for pennies per acre." It was a small pocketbook and all yellow, government hand-outs of land sounded good where does one sign up?

But it turns out that homesteading was ended several decades earlier so I was out of luck. However, the topic of tax deed sales was briefly discussed and that stuck with me. Technically, you weren't buying from the government per se, but rather the local county tax collector.

Two years later I had graduated college and had a fine part-time job paying $7.08 hour, and, had moved out of Los Angeles and into the sticks. Luckily my new mortgage was $189/month, and I had enough left over to buy a subscription to the bi weekly newspaper. In the fine print there was noticed a tax defaulted land sale with properties ranging from $25 to $3600. (in my price range!)

Now fortunately I already had a savings of a few hundred dollars, and was able to bank a couple more pay checks before the auction. Drove about 80 miles and took my seat in the back of the courtroom on an early Monday morning. The first property up was 7.15 acres somewhere a few miles out of Lone Pine, CA. $1300 minimum bid, I squeaked out a bid, the entire room turned around and looked at me and there were no challengers - which was good because I had only brought $1400 cash. Sold for the minimum asking price.

Drove right out to take a look, liked what I saw - Mount Whitney, Lone Pine Peak, and views across the Owens dry Lake. Then a fighter plane from Ridgecrest made such a low level high speed pass that I thought the pilot was going to crash - scared the heck out of me for a second.

I really liked the fact that the land was bought and paid for in full. Taxes were reasonable about $24 a year. But above all, the gut feeling that the land was far more valuable than it cost convinced me that wealth was being built. Still have that property, but have bought and sold many more like it since.

Well that's it in a nutshell, anyone else have a story please share.

[Jim Wineinger]

Mostly similar, as I started doing tax sales years ago and do not have the fiancial backing to fight to be the highest bidder on those good homes. So I end up with land only that no one else bids on.

Having it free and clear it does have equity value and with enough of those "purchased" I will put them in a portfolio for the bank to allow me a line of credit, with those as collateral, so that I can fight for those good homes to buy as investments then sell for my retirement nestegg.

Not sure how long it will take as the good home will have to pay off the line of credit and provide enough extra for the next good home. Doing things within my means may take a while but I will get there without getting caught in most of those pitfalls of overextending my credit ability to pay.

[Richard Warren]

While investing in and is not my cup of tea, I did come across a good book on the subject. It talks about avoiding the scams and investing successfully.

http://www.amazon.com/Pay-Dirt-Darren-K-Proulx/dp/0977780120/ref=pd_bbs_sr_2?ie=UTF8&s=books&qid=1237394268&sr=8-2

:cool:

[John C.]

Hey Richard I have that book and you can imagine my surprise when the author registered just recently on this site around the same time I did.

http://www.biggerpockets.com/forums/55/topics/29886-new-investor-here-

I've watched plenty of land go for top dollar at land auctions near Parumph and Spanish Springs Ranchos. Too far out for me to get interested though, like to stay local.

Jim, one thing I've noticed is that my banks never were interested in my portfolio of land (as collateral) until I showed them all the owner financed notes that I had against them. Then they perked up a little bit. Thanks for sharing - John.

[Richard Warren]

Originally posted by John Connolly:

Hey Richard I have that book and you can imagine my surprise when the author registered just recently on this site around the same time I did.

http://www.biggerpockets.com/forums/55/topics/29886-new-investor-here-

It is a small world.

:cool:

[Jim Wineinger]

As of right now in the downturn economy, with fewer being able to show ability to repay via low scores and debt to income ratio, they have SAID that they will be willing to take those land parcles using an HELOC using the top credit line at only 40% of lowest appraisal found.

I am dealing with my credit union so they are willing to work with me some but are making it hard, but who can really blame them at this economic time.
Establishing that rapport will get me started and as the economy returns they will be even more willing to assist.

Besides they say how I bought one parcel for 1376.00 which had an abondoned house on it. Abondoned for about 15 years. New roof, new porch, everything new inside (had to chase a family of bats out of the house). Gutted it to the studs and redid everything including the missing electrical and plumbing. I used them and my equity, which was not much at first, and took two fully years but is now valued at 125k.

Persistance and determination always pays off. Peole and events can slow you down but they can not stop you.

[Deborah Castro]

I thought I was going to get rich quick through purchase of tax default properties last year.....wellllll, I bought and sold and managed to buy myself a lunch. Currently I am holding 3 tax liens between FL and AL, so I think 2010 will be my "big" year. HAHA! As someone already stated, I do not have the resources to be the highest bidder on the "good" properties. It seemed that most of the properties went for more than their dang assessed value on **********. hmmmmmm

[Deborah Castro]

Hey John, you still have that property in Lone Pine?! I'd like to have a peek at that; I spend quite a bit of time in those mountains and climbing at Alabama Hills; really dig the little town!

[Jim Wineinger]

Deborah: I have not really seen any good deals in thos on line auctions. It would be best to go to your local county auctions (the ones that are not on line). This is where there is found most of the good deals. But you must do your due diligence or else.

One idea that I have seen is to pick up land at those local auctions and sell the same land at the Auction houses, even those on line ones. I have seen one lot purchased at the tax auction for 150.00 and sold at another auction for 5k with is assessed value at 8k. Of course you will have to wait out the reclaimation period if there is one.

[John C.]

Jim: Nice work on your run down house! I had to do the same thing before with bats and they eventually relocated outside in a bat house that I set up for them. Might have put their house to close to the window though because sometimes they make a racket late summer evenings. You're right, determination, and a slow focused pace gets you where you want to be.

With land I never realized any big profits until about 8 years into it. That may be a big reason why there aren't that many land investors out there because most want to see money now.

Deborah: B4Assets used to be the place to buy, then it became out of control with bidders throwing money at anything and everything. Times have changed and the auctions there are becoming more reasonable, so I've been watching. But Jim is right, check out the local offline sales, smaller counties are better to start in - big county sales like Los Angeles are zoos.

And I do have that property in Lone Pine still. Have to hold onto it for sentimental reasons, and still spend lots of time out there. I have a hand drawn map if you ever want to check it out, but you need 4x4 because parts of the road are sandy. At one time Lone Pine became our home away from home, great place and greater memories. Once while hiking up in Horseshoe Meadows (and in a thunderstorm) I saw a pack of coyotes take down a baby deer while the mother fought them all off.

There are a couple places out there that I highly recommend to stay the night, Cerro Gordo ghost town (Belshaw House), and the De La Cour ranch above the Alabamas.

[Jim Wineinger]

Hey john, to answer your first question directly, "Who got you started on ivesting in land?" it was my brother's wife who planned to buy one of those tax sale infomercial products and I talked her out of it by showing her how easy it is to find out that information on your own and showed her the pitfalls by doing one. And the results you saw. She does not have the financial backup to be able to do what is necessary to complete what is necessary to make it work.

In short I talked her out of it and me into it.