Our monthly Ask the Expert educational Q&A sessions are one of the benefits of our myEQUITY clients-only online community. Our guest experts contribute their knowledge on a wide range of investment and IRA subjects.
Here is a selection of real client questions and expert answers from Mark Podolsky (also known as The Land Geek) during his 2015 and 2016 Q&A Sessions:
QUESTION: What are some exit strategies when it comes to investing in 100 plus acres in rural Mississippi or anywhere? What are the concerns when you are managing acreage this large out of state and you create a hunting club or use the land for timber sales? What are some other long term investment strategies for investing raw land when your goal is to hold the land?
This is what's great about land is you don't have to maintain or protect anything like you would a physical structure.
You can make improvements to the land, clear it, survey it, sell the timber, lease it, etc. It just comes down to what is the highest and best use for this property. You could certainly create a hunting club and there are companies that match hunters with hunting land and take a small fee and provide the logistics for this service to the land owner and hunter.
Other long term strategies would be to sell it on owner financing and make it cash flow or make improvements and then sell the land at a higher price with the additional value you created.
QUESTION: What are the factors you need to consider before you decide to purchase raw land?
You want to make sure there is something compelling about the property.
Is it in the path of growth? Is it near a growing community, are there no restrictions? Does it have mountain views, and you use it recreationally? You want to make sure it has legal access.
Title is free and clear of liens and encumbrances.
You are buying it below the comparable values in the area so you can make money on the parcel.
There are no environmental issues. You can research superfund sites at epa.gov
People are not dumping on the property- use wegolook.com to crowdsource this...
What are the neighbors like?
Just remember there is a pig for every barn and you are not the market...
QUESTION: Have you ever seen undeveloped land come up in a foreclosure situation?
This is common and a great way to acquire land at pennies on the dollar pricing. I have contacts with a lot of secondary lien investors that have raw land in their portfolio that simply don't want to deal with selling the raw land and the asset class doesn't meet their sales and ROI model. We can pick up those liens, foreclose and then own huge tracts of land, farms etc., and then sell to developers or investors and make incredible returns.
QUESTION: No tax liens to buy in Minnesota; however have considered approaching owners behind on payments ... any suggestions on message verbiage?
I get right to the point in my offer letters and just say I'd like to purchase this property for this amount contingent upon due diligence, and back taxes not being onerous...
This is just a sampling of one our myEQUITY Ask the Expert Q&A sessions. For more details about becoming a client and gaining access to all the sessions with experts (and transcripts from previous sessions), schedule a free consultation with a Senior Account Executive.