Undeveloped Land: Buy When Everyone Is Selling! Why It Is Time To Buy NOW

Undeveloped Land: Buy When Everyone Is Selling! Why It Is Time To Buy NOW
By Scott R. Linden


I'm a General Contractor, and a Real Estate Broker and I began building large custom homes in 1983, during a deep recession - in fact, I believe it was the second deepest recession in U.S. history. By 1991 I had built over 200 custom homes. During the 1990s I purchased three large pieces of waterfront land in the North West, and developed three separate projects. I personally sold all the building lots which I created. I know something about real estate cycles and land values.



In 1968 my parents moved to Barstow because my Mother was a chronic asthmatic, and her doctor suggested the desert. We purchased a home for $18,500. A full four years later that house was still worth about the same amount of money. Suddenly, in 1973 inflation flared up and stayed up until the mid 1980s. How bad can inflation get? By 1979 my family's home in Barstow was worth nearly $100,000 - about a 500% value increase in just six years!

In 1982 I purchased a new house in Hesperia, California for $58,000. Interest rates at the time were about 20% - no, that's not a typo: twenty percent! High interest is how the FED finally stopped the inflation, but it took a while. Lucky for me, my real estate agent at the time got me a special deal on a loan at 12 3/4 %... so I married her. The house she sold to me was worth $105,000 by 1988.

I purchased a new condominium in San Clemente as a second home in 1988, for $113,000. That same condo was worth about $450,000 at the peak. One just like it is for sale now for $129,000. Yes, what goes up must come down, but did you know that what goes down must go up? Do you think the condo in San Clemente will remain at current levels?

What's the problem, and why should you buy some sort of real estate right now? You may have lost a house to foreclosure. If so, you're among millions of people who cannot buy a home or investment for 3 to 10 years. Ouch! What can you do? You can buy raw or undeveloped land, or a developed lot right now by simply finding an owner who will carry the paper (a note and deed of trust or land contract) on the sale. This is called "Owner Financing," and it has worked like a charm for a very long time.

When I did my waterfront land projects, I made wild and crazy offers on each piece of property we looked at, including offering nothing down and no payments for a year on 4,100 lineal feet of waterfront property with a total purchase price of $135,000 - the offer was accepted! I suggest that you nicely make rediculous offers. I made over $600,000 on that one piece of property during a five year selling period, but I should have kept it! It is worth about $3,000,000 - even in this recession.

What should you do?

You can and should protect yourself and your family from inflation by finding and buying land at any value-level you are comfortable with. On the low-end of the scale for example: You can buy five very nice acres with power just two miles from the freeway in the beautiful desert area of Newberry California for $10,000. This same property was worth just under $50,000 at the peak of the last real estate boom.

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