So, Why would Anyone want to Invest in Land?

ICOR Blog & News,

by Jonathan Havelas

Why does land investing appeal to many people? With houses, you really can’t buy it for next to nothing. And if you do, there's a reason, it's just garbage. Whereas with land, there are different types of property that are valued all over the place for whatever reason. You can buy properties for 10 - 20% of value. When you do that, you can get in at a much lower rate that fits your confidence level, or what you feel comfortable with to begin with.

So, why land? Why would I invest in land? Well, the truth is that we are geared to go a different way. Everything we see as far as real estate programs or even television shows, the fix it upper shows and similar shows are all about houses. And of course, they show you the glamorous side of it. You get to redecorate; you get to tear down walls and turn it over from just a cheap house to an immaculate home and make $100,000. Well, that's nice but the problem is they don't show you all the issues that are involved or if they do, they minimize them and somehow they overcome every one of them every time. And the fact is, that's just not real life.

                There are going to be issues along the way and houses present a lot more than land does. With a house, you can run into issues as you start rehabbing or even wholesaling, you could still run into issues. You could have an issue with the sewer lines. You could have an issue with the electrical. You could have an issue with paint. You could have an issue with the roof. You could have an issue with pests. And On and on the list can go. These issues can get into thousands, tens of thousands of dollars to correct them while land doesn't have those issues. That's the bottom line. What we buy is exactly what we sell. We buy a piece of property and we sell that same piece of property. It's not possible to go out and destroy it or ruin it like a house could be. You would literally have to have somebody go out with an excavator and start digging a big giant hole and even then, it wouldn't really be destroyed. It would just be a little less appealing, but it could be easily fixable.

                And honestly, we've done thousands of deals, and that's never happened once because it just doesn't exist. Whereas, we constantly ran into different issues with houses. So yes, houses are appealing. People like the way they look, they like the way they sound, and we're just geared towards thinking that's where the money is in this business and in investing. But in reality, land poses a much easier barrier of entry to get into. There are ways to do land deals with very little money up front. And that's true in houses too, but it's even easier in land and you can actually own the properties. That's not true in houses.

                There is very little money up front, you are not borrowing it from others, and you still have ownership of the property. You will not run into the issues that you get with houses that we already discussed. So even if you have to retain it, you don't have to worry about these issues existing. And lastly, there's really no competition in land. Well over three quarters of the country is still vacant land. And then you add to the fact that hardly anybody's focusing on it. Everybody goes into the housing world and there are 1,000 investors working in one city. Meanwhile, there's not even 1,000 land investors working in the entire country. There are very few people that focus on this full time. There's so much potential out there for land deals.

For example, I had worked with a few people a couple years back. One of the things that they had was a lack of confidence. Because of this, we put them into buying super low end lots. Abandoned subdivisions, stuff that most people aren't going to want, but they were able to buy them for around $50 and sell them for $500. Although it was low end, they were making 10 times their money! Now I don't want to deal with you like that. Honestly, to me, that's too small, but they still made 10 times their money. They made $450 per lot and it helped them to build up their confidence.

            Then they realized, if they can do this with $50 and then selling it for 500, they could do it for $500 and sell it for 5,000, or buy for $5,000 and sell it for 50,000, and that's the way it works. Maybe you come right into through the gate and you’re willing and able to go out there and spend the big bucks.  Maybe you’re able to pay $50,000 for a property, and sell it for 150,000. That’s a great deal, a hundred thousand dollars in one deal. But a lot of people don't have $50,000. They feel timid about it. Even with transactional funding, they don’t feel comfortable doing that. Whereas if it's a $500 purchase price and it's worth $5,000, it's a much lower barrier of entry than all other forms of real estate and because of that and because of that, many more are a lot more comfortable with entering

The reason many people get into land investing is because it's a lot easier, and has a much lower barrier of entry. It also helps you to build your confidence, move forward, and get comfortable with investing.


*Jonathan will be teaching a workshop Saturday, March 18th, “Closing Land Deals Workshop: The Most Overlooked Investing Strategy” in Denver. Use Promo Code “LANDMETHOD” to receive 50% off registration at