Cheap Land in America

There are various approaches to investing in land that can range from “expensive and risky” to “affordable and safe.” For instance if a person purchased 5 acres on the outskirts of a growing city for $435,600 ($2 per square foot) with the intent of rezoning the land and developing a residential subdivision – this could be very expensive and risky and the end result might well be a total loss if rezoning isn’t successful; if financing isn’t available to construct the homes; if loans aren’t available for people to buy the homes; and if the economy weakens to the point that demand for the homes evaporates.

On the other hand if a person did nothing but acquire 500 acres of rural land for the low price of $125,000 (only $250 per acre) with the intent of holding the land for some years into the future – this would be a very affordable and safe approach. In fact history has proven that it is literally impossible to lose money owning land if purchased cheap enough and held long enough.

Suppose in 1920 (90 years ago) a grandfather had been given the choice of placing either $100,000 worth of Studebaker stock (one of the leading Dow Jones stocks of the day), $100,000 in United States currency or the deed to $100,000 worth of range land (20,000 acres worth $5/acre) into a safe deposit box to be opened by his grandchildren 90 years later (in 2010) – which asset would be worth the most to his grandchildren today (in 2010)?

• Studebaker stock certificates would be worthless as the company went out of business and no longer exists!
• $100,000 cash in the year 1920 has the same equivalent buying power today (2010) of only $10,000 (in other words inflation robbed the dollar of 90% of its buying power in the last 90 years)!
• 20,000 acres of range land would be worth at least $5 to $6 million!

Buying cheap acreage and hanging on to it through the years might not be the fastest way to make money but it could be one of safest and surest methods!

To review some of the cheapest and most spectacular land deals to be found anywhere in the entire United States of America today, simply “click” on the link below.

                       www.CheapLandinAmerica.com/buynow

Wilfred and Barney were two rural land speculators who followed diametrically opposed philosophies. Wilfred specialized exclusively in buying expensive “trophy ranches” with county roads, utilities, streams, ponds, tall trees and breathtaking mountain scenery admired by all. Barney focused solely on acquiring barren land with no utilities in the “middle of nowhere” for the lowest price he could find and nothing mattered to him except price. Some years later Wilfred filed for bankruptcy as he sadly discovered too late that while “everyone might admire” breathtaking mountain scenery, such desires can’t always be converted into profitable transactions. Barney, on the other hand, retired on his yacht in the South Pacific as there were always willing buyers for cheap land and inflation alone resulted in a substantial appreciation of his assets.

Wilfred dealt in “subjective” values (which are in the eye of the beholder and can fluctuate for many reasons) while Barney dealt in “objective” values (which are absolute in nature and can usually only appreciate)!

Large tracts of unimproved land for just a few hundred dollars per acre located in states like Texas, New Mexico, Utah, Nevada, Wyoming and the Dakotas can provide tremendous long term potential. The dictionary defines the word speculation as “a business venture offering the possibility of a large profit but entailing risk,” however history proves it is literally impossible to lose money owning land if purchased cheap enough and held long enough.

Cheap acreage speculation in the United States today is a real estate niche that is mostly overlooked. That is unfortunate because this activity can produce substantial profits without all the operating complexities and troublesome business cycles associated with residential, resort and commercial developments. Cheap acreage appreciates in value due mainly to inflation instead of having to depend on rezoning, approval of development plans, financing and so on.

Inflation means that through the years paper money is worth less and less and finite assets like land is worth more and more. Inflation is caused when a government prints trillions of new dollars resulting in the depreciation of existing dollars. At the same time the dollar is being depreciated, land is appreciating because not one new acre can be created.

An example of the effect of inflation would be 5,000 acres of grazing land located in the “middle of nowhere” purchased 20 years ago (in the year 1990) for $30 per acre. Today the 5,000 acres would look exactly the same as it did 20 years ago; the use of the land would still be cattle grazing; zoning would be the same; there would be very little population growth in the area; no oil would have been discovered; no roads were built and no development of any kind took place – yet the same 5,000 acres would now (in the year 2010) be valued at close to $250 per acre. Thus the initial price of $150,000 would have grown to $1,250,000 in 20 years representing an 8 x 1 increase. And the amazing thing is the landowner did absolutely nothing to cause this increase.

How did the stock market perform over this same period? In 1990 the Dow Jones was 2900 and today it is around 10,000, a little over a 3 x 1 increase. What about the value of cash over the same 20 years? According to the U.S. Census Bureau of Labor Statistics it takes $165 today to buy the same goods and services that $100 purchased back in 1990. This means that inflation robbed the dollar of 40% of its purchasing power in just the 20 years.

There are countless business people in the United States today who, with brilliance and fortuitous timing, have made huge sums of money in various enterprises. However, speculating in a large tract of cheap acreage just might represent one of the surest and safest long term assets a person can own!

It’s “all in the family” for the seller of 160 acres in Wyoming, whose family-run business sells land exclusively on eBay

SAN JOSE, Calif.–(BUSINESS WIRE)–Aug. 12, 2002– It was announced today that Mr. Doug Caffey, founder of GotAcres.com, sold the 15,000th parcel of land within eBay Real Estate’s land marketplace. Leveraging the speed, reliability and exposure that eBay (Nasdaq: EBAY - News; www.ebay.com), offers, Mr. Caffey sold a 160-acre land parcel southwest of Casper, Wyoming to a buyer in Maryland.

“My family has been in the business of buying and selling land for over 35 years now - in an industry that previously relied only on telephones, newspaper ads and facsimile machines,” said Mr. Caffey of Costa Mesa, California. “When you consider that selling is simply a percentage game; eBay is a sure bet because it provides instant exposure to millions of people - without regard to time of day - for only a few dollars a day. GotAcres.com now sells only through eBay because we can move more properties, for less expense and with higher returns.”

GotAcres.com is typical of many sellers that use eBay as a way to conduct business. Mr. Caffey and his family specialize in acquiring and selling large tracts of land at some of the lowest prices per acre in addition to offering seller financing.

The parcel of land sold in Wyoming is home to many species of wild animals, including large herds of antelope, and was perfect for Timothy Buckley. Mr. Buckley was interested in finding a parcel of land that both suited his budget and helped him fulfill what he termed, “My dream of owning a piece of America.”

Visitors to eBay Real Estate’s land marketplace can preview and purchase land from across the country. Landowners within the market can either post their property for sale as an auction or as an ad listing to generate referrals from interested parties.

Doug Galen, vice president of eBay Real Estate, Travel and New Business added, “Without eBay, this marketplace could never exist, leaving millions of us city slickers without any way of ever knowing that there was that perfect piece of land just over the horizon.”

For more information about eBay Real Estate or its land marketplace, visit www.ebayrealestate.com or call (408) 376-5146.

ABOUT eBAY REAL ESTATE

eBay Real Estate is the world’s online marketplace for real estate-related properties and services. Launched in August of 2000, eBay Real Estate operates five core categories within its marketplace: residential homes, timeshares, foreclosures, plots of land and commercial real estate. Both individual buyers and sellers and real estate professionals can enjoy a complete offering of services that make purchasing or selling a home safer, easier and more efficient. eBay Real Estate is a business unit of eBay, Inc. and can be found at www.ebayrealestate.com.

The “high end” rural acreage market basically refers to “trophy” ranches located in the western states. The definition of a “trophy” ranch is acreage with beautiful views, trees, streams, ponds and excellent hunting potential. The value of such properties is determined solely by individual perceptions of a finite number of wealthy buyers – in other words this market is purely “subjective” as to pricing.

On the other hand the “low end” market is “objective” in nature (in other words not influenced by “emotions” or individual “perceptions”) and refers to the lowest “per acre” prices available anywhere in the United States. This market is much easier to evaluate as pure, absolute numbers are used instead of perceptions and emotions.

What about price fluctuations in the “high end” rural acreage market over the last several years? The premier “trophy” ranch real estate brokerage firm, Hall & Hall located in Billings, MT, recently announced that $160 million worth of purchase contracts had fallen through; sales had plunged from $1.2 billion in 2007 to only $50 million for the first half of 2009; and prices had declined another 20% in just the last six months.

What about price fluctuations in the “low end” rural acreage market. While the volume of sales have slowed somewhat prices still remain pretty much near historical all time highs. Twenty years ago (in 1989) the lowest “per acre” priced land in the United States could be found in Northern Nevada, West Texas, Northwest Utah, Eastern Montana and Southern Wyoming. Large tracts of rural acreage and range land could have been acquired at that time for as low as $10 to $20 per acre. Today (summer of 2009), except for maybe a few isolated examples, the lowest “per acre” prices to be consistently found in these same areas would be $250 to $500 per acre. This represents a price increase of approximately 25 x 1 while during the same period the Dow Jones only increased from around 1,200 to a little over 9,000 (a 7.5 x 1 increase).

Thus history reveals that it is almost impossible to lose money owning large tracts of low-priced acreage if purchased cheap enough and held long enough!

Raw, undeveloped rural acreage has always been one of the most exciting and overlooked segments of the real estate business. This type of property usually increases in value through the years solely as the result of two inevitable causes – an ever increasing population together with ever present inflation. In fact history proves that it is practically impossible to lose money owning land if bought cheap enough and held long enough.

Doug Caffey began dealing in rural land in 1967 with the purchase of 160 acres located on the slopes of Mt. Shasta in Northern California. On literally the last day of the 90-day escrow Caffey finally resold 80 acres for enough to pay for the entire 160 acres and immediately began searching for more deals. In the ensuing years Caffey became one of the largest rural land dealers in the Western United States and has been involved in the acquisition and marketing of approximately 500,000 acres scattered throughout California, Oregon, Utah, Nevada, Wyoming, South Dakota, West Texas and Oklahoma. His partnerships and companies control millions of dollars worth of land sales contracts and trust deeds and bank references can be provided.

Caffey’s view of the land business has always been exceedingly simple. While most land investors and dealers take the “subjective” approach (meaning that values are based on the buyer’s perception of future developmental potential), Caffey’s approach is strictly “objective” (to him a relatively low “per acre” price is all that really matters). That is why in 1993 Caffey and his partner quickly purchased the 17,000 acre Blake Sheep Ranch that no one wanted in Sweetwater County, Wyoming solely because the price was only $13 per acre. Through the years this ranch was resold in smaller tracts for prices as high as 25 times the purchase price resulting in a profit of several million dollars – yet nothing was done to the land, no development occurred and the zoning remained the same. Price alone was what attracted Caffey and his partner and price alone was the primary motivation for subsequent purchasers.

In Caffey’s 40 year career in the rural acreage game he has been involved in various interesting deals with a cast of colorful and notable characters. Caffey and another partner purchased 600 acres in Whiskeytown, California and resold it to a legendary Hollywood talent manager and wheeler-dealer. Caffey purchased the “Ranch of the Stars” in Lassen County, California from Art and Jack Linkletter and resold it. He optioned the Ochotorena Sheep Ranch near Ravendale in Northern California and resold it to an investment group in the Philippines headed by a prominent attorney who was on General MacArthur’s staff during World War II. He purchased a large ranch in Siskiyou County, California from the Parsons family and resold most of it to Hong Kong investors. In 1973 he traveled to New Jersey and optioned 112,000 acres practically bordering Reno, Nevada from Curtis-Wright Corporation. Among the potential buyers he personally showed the property to was Morris Shenker, Jimmy Hoffa’s mob connected attorney who later owned the Dunes Hotel and Casino in Las Vegas. Even though the land was optioned for the amazingly low price of $25 per acre, and offered for sale at just $69 per acre, a buyer was never found – but today that same land contains shopping centers, commercial developments and housing subdivisions and is worth many millions of dollars.

There were many other deals involving real and prospective buyers including Cal Worthington (the famous TV car salesman); John DeLorean; several movie stars; the president of World Airways; the vice-president of Harrah’s Hotels and Casinos; Robert L. Vesco (the fugitive financier who was accused of stealing over $200 million in the 1970s); wealthy Japanese investors and several Wall Street tycoons.

Caffey is imminently familiar with all aspects of the rural land business including purchase negotiations, installment land sales, various county and state subdivision regulations, release clauses, substitution of collateral agreements, ingress and egress easements, title policy issues, marketing programs, account servicing and collections, and institutional and private financing. Caffey firmly believes that this particular niche of the real estate business is in the embryo stage and offers spectacular potential.

If you wish to discuss with Doug Caffey directly about any rural land opportunities, thoughts or ideas you might have, email info@CheapLandinAmerica.com or telephone (800) 421-7163.

Buying low “per acre” priced rural land in the United States and holding it long enough is a fool proof method historically guaranteed to increase assets. Consider the Louisiana Purchase in 1803 of 530 million acres for 3 cents per acre, the Alaska Purchase in 1867 of 375 million acres for 2 cents per acre or the vast railroad holdings and large ranches assembled in the late 1800s and early 1900s for prices ranging from 10 cents to $10 per acre. Even as late as 1993 the lowest priced acreage to be found in the United States (located in several western states) was around $15 per acre and today (March of 2009) those same properties are around $250 per acre, representing a price  increase of 16 times. As a comparison the Dow Jones in 1993 was 3,500 and today (March of 2009) is around 7,000, representing a price increase of barely 2 times. Does anyone really believe that the low “per acre” prices of today won’t be a tremendous bargain compared to the prices 20 years from now?

Big name banks and financial institutions have collapsed, trillions of dollars in stock market values have evaporated, billions of dollars in home values have been lost to foreclosures and treasury bills are paying dismal returns. Are there any dependable assets still available? Perhaps low priced rural acreage located in the “boondocks” of rural America might offer some interesting possibilities.

Please consider the following facts pertaining to low priced rural land.

1. Unlike many assets history has proven that it is practically impossible to lose money owning low priced land if purchased cheap enough and held long enough.
2. Projections are that by 2050 the population of the United States will increase by 100 million people, yet not one acre of new land will be created.
3. Inflation alone (remember how much postage stamps, automobiles, food, shelter and a gallon of gasoline have increased over the last few decades) can beneficially impact the value of low priced land.
4. Land can’t be manufactured, stolen, destroyed, burned down, or mismanaged and always remains.
5. Unlike common stocks raw land never “goes out of business” and can’t be outdated by new technology. Many excellent stocks of 50 years ago simply don’t exist today yet every acre of land that existed 50 years ago is still here and worth more today than it was then.