To the RE Gurus: Buying Land, a Win-Win?

[~attrACTION~]

I know this is not a financial forum. I read the sticky.

I understand there are some investors among us here, and I had a quick question. I know of some investment forums, but they are not nearly as active as this forum, and most of them are filled with scammers and agents trying to get a deal with you.

So, I am thinking of spending roughly $2-$3K on raw land, such as would be usable for farming or home-building. For example, I have found some parcels in Cochran County, TX. More specifically, I found a 10.3 acre lot selling for $2,500 and it's open to negotiations.

I'm wondering, since $2,500 is like pocket change in the world of investing, do I really have anything to lose? Is it possible for the land to really decrease in value?

Also, if anyone here knows about land, do you think TX is a good place to invest?

I really want to take the opportunity now that it's a buyers market and prices are low. It seems like a great time to buy.

Thanks for any advice. And if you know of any other, more active real estate or land investment forums, please post a link (the best one I know of at the moment is BiggerPockets).

 

[spider_007]

If your going to invest in land be prepared to go very long term. As in, this is your-retairement-money-long-term. Investing in land is defently more profitable then any mutual fund, or GIC.

Friend of a friend bought a few acers about 10 years ago for few grand. it was just outside the city beside one of the more traveled roads. I think he paid 20-30 grand for it..... The road got develped, city expanded, there is a big shoping center right in front of it...... now his is being offered 1.2 million for it. AND HE IS STILL NOT SELLING.

land is defently a good investment, but like with anything else, it can be a hit or miss... Location is very imporatant, and before you sign on the doted line, you got to be able to see the BIG PICTURE.

 

[Bonhomme]

Unless your land is in a prime location for parking lot or resort use, land is not income property, so be very careful and investigate the deal very, very thoroughly.

Like Spider said, land can be a killer investment if you get it in the right place -- or just get a good enough deal so you can flip it to a builder or developer at a good profit. But it can also be a big waste of your money.

I'd be suspicious of "deals" on land offered by anyone who looks like they really know what they're doing. If they do and it's such a great investment, why would they be selling?

 

[ricorico]

3 years ago I purchased 50 acres of land in Wisconsin from cousins who inherited for 90 thousand. The land was accesed at close to 200 thousand last year.

They are expanding the right in front of the begining of my land from 2 lanes to 6. The project is due to finish in 2011.that will make my land(which is in a beautiful area ) about 20-25 minutes from Madison Wisconsin when the project is complete. I think by then, I can get a least $30 grand an acre . But my father and I are thinking of developing the area since it is so beautiful and we think there is even more money to be made that way.

Ironically, I got a lot of my money back already as there is tons of wood on the land which we had chopped down last winter by a local lumberjack we know who got me paid. I'm lucky my father was willing to lend me over half the money(which has already been paid back)for my investment because he saw it as a good one and he loves to buy land. Also lucky my cousins who both now live in North carolina did'nt really care to negotiate.

The best land story I heard was from the guy who owns the carwash near me. About 5 years ago he owned a car wash in Atlanta. Some old guy used to come around and offered to sell his 500 acres for $1,000 per acre. The car wash guy kept saying no. He went as low as $750 per acre. The car wash guy still said no. One day he sees the old guy and the old guy is happy. He tells him some developers offered him $5,000 per acre and he sold it all! Now I imagine the developers underpaid. But the guy never even knew what his land was worth at today's prices. I'm sure he could have gotten much more. The car wash guy still regrets being so stupid.