How to Buy Land With Other People's Money (Step-By-Step) - Capital Raises - Investment banking

How to Buy Land With Other People's Money (Step-By-Step) - Capital Raises - Investment banking

Many people who come to raises.com, they want to do a development product project rather. So how do you double your money on land using other people's money? So how do you buy land without using your own money and sell it without taking any risk? There's actually a very simple way to do this and basically it's really in two steps.

?

The first thing is getting a land, piece of land under contract. So what, for those who don't know what under contract means, Just make an agreement to buy a piece of land even if you don't own the money So you do this and when you do this What's crazy is that you can actually use other people's money to buy the land by saying that hey Look, let's say there's a piece of land that costs, 10 million dollars, right?

If you don't have access to that 10 million dollars you actually only need access to 25 of the 10 million dollars because a lender could probably lend you 75%. Maybe you can find it for not as high. Maybe it's a bit lower than that. Usually, let's just say for simplicity, it's 75%. You just need to raise 2.

5 million dollars to acquire that land. So the way that you can raise that money is to do something called a private placement. So basically when you sell investors a deal, and if you do one, and there are other videos on the channel that explain it. Then you can raise money to buy that land so now that you bought the land instead of so what most people do when you're Buying your first piece of land like instead of doing a development project where you develop the projects And then you're you know you build like a casino, or you build some crazy stuff on it some people what they do instead They simply just rezone it slip it so you have a bunch of laws that determine the stuff that can be built on land zoning permitting and licensing So, these are rules that cities come up with to make it really hard for people to just, if not to be in a developing country, people can just do whatever they want.

Especially in cities that are very congested. And old and big and populated you have a lot of zoning and regulation And so basically when you buy a land and you want to change the purpose of the land that you bought to build stuff On top of it You have to get a bunch of permits and you have to talk to city council and do a bunch of that stuff So it's really tedious and i'm not an expert on talking to the city council or anything but a lot of people that raise money do this and then after you figure out how to Get the zoning and licensing that you want to build a type of asset that will make you more money Then what you do Some people just sell it to builders.

So instead of taking the risk of building and developing on land, you just buy land, rezone it, so that you're able to build more houses on it to rent out to people. And then sell it to somebody who wants to build it. That way, all you have to do is be a specialist at buying land, and at sitting on board council meetings, and paying some money.

How to Buy Land With Other People's Money (Step-By-Step) - Capital Raises - Investment banking

I believe it's around it could be between 10, 000 to 40, 000, who knows. I've heard people pay 40, 000 on a 4, 000, 000 piece of land. to take it to city council and stuff so that they can get the appropriate licensing and zoning that they need to build more houses and appropriate type of houses.

And if they do that, what's crazy is the value of the land goes way up. So I've seen people like by 75 percent or 175 percent rather increase of value just by sitting on a couple of meetings waiting about four months to do this. So yeah, some people are really specialists at this. So instead of somebody taking on an overly ambitious first project of buying a land and then rezoning land and then building a bunch of buildings on it, what you can do instead, you can let somebody else take it at risk, especially for your first deal by just buying the land and then rezoning the land, then selling it.

That way, you can make your investors happy or even yourself happy if you want to be the first one to take part in a deal. But you can make your investors happy by X'ing them earlier. Let a builder take the responsibility of all the zoning and sorry of building stuff and then learning how to build things and then All that's complexity and then you just make the profit from that initial flip so and the last thing the last reason why this is A different idea that more people should talk about is because you make more money and you're less stressed When you make an agreement to buy a piece of land, that's called getting the land under contract.

It can be under contract for a year. So the amount of stress is way lower. Whereas if you get a real estate deal like a multi family project under contract, you have to get under contract for only 30 days. That means that within 30 to 90 days or whatever you have to get it funded. So that means that you have to front load all the capital raising so you can close the house deal.

Whereas for the land deal, you have more time to raise money and there's less competition because there's less expertise and specialty of people. Or sorry, there's less, it's less mass market, less people, less competitive. And so if you keep this onto effect, you can win. And I guess the last thing is if you look at places that are less congested, they may have less bureaucracy, meaning that it may be easier to zone it.

to build whatever you want on the land, meaning that it's probably cheaper, quicker, and simpler to rezone it so that you don't have to go in as many pieces of city council meetings and it's less complexity. So it may be easier, even easier then to develop and to make a land flip. So with this, if this is something that you'd like to do, or if you want to learn more and get our team to do it for you, make sure you head to raises.com.

Go to Raises.com/website to book a call as well for your equity fund.

Follow Raises.com on LinkedIn by clicking here.