WHAT IS LAND BANKING?

If you're like most real estate investors, you're probably pursuing this business with one or two primary goals in mind:

• To buy a property and flip it for a profit as soon as possible.
• To buy a property and create a dependable source of passive income.

Both strategies are completely legitimate, time-tested methods that have created a lot of wealth for a lot of people in real estate. However, of all the various ways that people pursue real estate investing, one of the most overlooked and underused strategies I know of is a buy-and-hold technique known as “Land Banking”.

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WHAT IS LAND BANKING?

The name implies almost exactly what it is. Rather than putting cash into a savings account (where it will earn a maximum of 1% interest every year) or the stock market (which has become increasingly unpredictable in recent years), some entrepreneurs have taken an alternative approach by acquiring LAND and in doing so, they have chosen to park their cash in a tangible, fixed asset – one that cannot be broken, stolen or destroyed.

Vacant land gets ignored by most new investors because let's be honest – it just doesn't sound that exciting. Unfortunately, this causes most people to overlook a lot of the advantages that land has over traditional real estate investments (e.g. – houses, apartment buildings, commercial properties, etc.).

Unlike most residential and commercial buildings, land costs virtually nothing to own… no utility payments, no tenant problems, no termite infestations, no leaky faucets, no broken toilets (and if you buy it the way I do), no mortgage payments.

Think about it… you can buy a piece of vacant land today, walk away from it for 10 years and when you come back, nothing will have changed. Can you think of a safer investment?

And think about the economics of land… this is a resource with a supply that is always going down (after all, they aren't making any more of it) and a demand that is constantly on the rise. Given the value proposition that comes with owning land, I often find myself scratching my head and wondering “Why aren't more investors involved with this?”

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HOW LONG HAS LAND BANKING BEEN AROUND?

This strategy is nothing new. One of the most well-known examples of Land Banking over the past 500 years is John Jacob Astor, who used this strategy to become the first multimillionaire in the United States. He realized the power of Land Banking when he purchased large tracts of land which are now known as “Manhattan”. He acquired this land at a time when nobody else realized the opportunity. At the time of his death, Astor's estimated net worth would have been equivalent to $110.1 billion in 2006 U.S. dollars, making him the fourth richest person in American history.

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WHY IS LAND BANKING OVERLOOKED?

Most investors don't pay much attention to this opportunity because they don't have patience. People want their money now, they don't want to wait for decades to realize their gains. It's an understandable objection to land investing, and I've made some of my own investment decisions based on the same logic. There's no time like the present, right?

I suppose – but what about the long-term? What about retirement? What kind of fall backs do you have when (not if) the stock market crashes? Think 10, 20 or even 30 years from now – what will real estate look like then, and what decisions should you be making TODAY to make the most of the future? Just take a look at a few examples of when land banking really made sense…

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BEVERLY HILLS, CA - 1912

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BEVERLY HILLS, CA - 2018

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SHENZHEN, CHINA - 1982

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SHENZHEN, CHINA - 2018

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DUBAI, UNITED ARAB EMIRATES - 1991

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DUBAI, UNITED ARAB EMIRATES - 2018

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TOKYO, JAPAN - 1945

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TOKYO, JAPAN - 2018

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Think about it… what if you had bought land in these areas BEFORE their explosions in growth?

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HOW CAN YOU START LAND BANKING?

It's something that major developers and mass retailers have been doing for decades and it happens in every major city in America. Look at your nearest major metropolitan area and compare what it looks like now, to what it looked like 10 years ago. New neighborhoods spring up all the time! New commercial developments, new industrial parks, new retail establishments, are always being created or revitalized, no matter what the real estate market looks like.

All it takes is for an investor to go in and buy land on the outskirts of a city and then they wait for the population to grow to them. They're buying property at today's low prices (before anybody else perceives the value) and they just wait until the city grows to them. When this happens, the land prices spike in value and they're able to cash in on their land investment. MANY multi-millionaires have been created from this one strategy, and you can do it too!

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CURRENT LAND BANKING OPPORTUNITIES:

25 RANCHO ROAD, ADELANTO, CA

-45 MIXED-USE ACRES-

Totaling 45 Acres of Prime Commercial cultivation desert land, situated near Rancho Road in Adelanto, consisting of five gently sloping side-by-side parcels. Per contractors, rare water aquifers are accessible and available to be drilled for this parcel, along with solar energy opportunities.

The High Desert Market is located 90 miles NE of LA and encompasses the cities of Adelanto, Apple Valley, Barstow, Hesperia, Victorville and surrounding unincorporated areas of San Bernardino County. Interstate 15 bisects the region and Highway 395, Highway 18, Highway 138, Route 66 and Highway 58 all converge here. The High Desert is home to Southern California Logistics Centre (SCLC), an 8,500 Acre multi-modal logistics hub.

SCLA, the 2,500 Acre logistics airport, provides two intercontinental runways including a 15,050 foot runway, allowing access for even the heaviest aircraft. GE Aviation and Boeing are just two of the companies that have taken advantage of the low traffic airport.

OFFERED AT $4,195,000

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888 OUTLET CENTER DRIVE - BARSTOW, CA

-160 MIXED-USE ACRES-

Totaling 160 Acres of Mixed-Use land with flat to gently sloping topography, this site is composed of the following parcel: APN #0419-151-33. Given the advantageous access to several important highways, Barstow has become a popular location for many industrial uses such as distribution centers and warehousing.

Barstow is a major transportation center for the Inland Empire. Several major highways including Interstate 15, Interstate 40, California State Route 58, and U.S. Route 66 converge in the city. It is the site of a large rail classification yard which belongs to the BNSF Railway. Barstow is almost exactly midway between Los Angeles, California and Las Vegas, Nevada. Barstow is home to Marine Corps Logistics Base Barstow and is the closest city to the Fort Irwin National Training Center.

Additionally, located southwest of the town is the upscale Tanger Center Barstow which is a popular stop for tourists traveling between Greater Los Angeles and Las Vegas.

OFFERED AT $1,750,000

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One way to scope out which areas may be ideal is to use Google Earth to see the historical satellite imagery of the area you're interested in. This video explains how it works…

Look for areas that are in the path of growth. These areas exist in literally every metropolitan area in the world and they are often overlooked by the 98% of real estate investors who are only in this game for fast cash. If time is on your side (and let's be honest – unless you are terminally ill, time is almost always on your side), this is a strategy you should be active in.

Contact me below without hesitation with any questions, comments and/or concerns!

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