Archive for January, 2014

Tips When Purchasing Cheap Land in USA that is for Sale

Robert Morris signed the Declaration of Independence and helped finance the American Revolution. He was one the original U. S. Senators from Pennsylvania, and from 1781 to 1784 was the Superintendent of Finance for the fledging federal government. He was one of the wealthiest and most powerful men during the founding of the nation and also was one of the first and biggest speculators in cheap land in USA for sale.

Mr. Morris was involved in various acreage speculations throughout the colonies, but especially in Georgia, New York and Washington DC. One of his biggest deals was the acquisition of the Phelps and Gorham pre-emptive right to approximately five million acres of land in Western New York. He aggressively tried to market his vast holdings throughout the United State and Europe.

The Panic of 1796, caused by Atlantic credit markets, liquidity issues with the Bank of England, and war scares between England and France, resulted in a serious economic downturn in the new nation of the United States. Robert Morris was “land rich” but “cash poor” and unable to meet his financial obligations. In 1798, he was declared bankrupt and sentenced to debtor’s prison. After release from prison, in poverty and ill-health, he lived only a few years longer and died in 1806.

So is land speculation an ill-conceived enterprise that is destined to fail? Absolutely not! In fact quite to the contrary, dealing in cheap land in USA for sale is an almost guaranteed method of making substantial sums of money IF two simple rules are followed.

Rule #1. Never buy more land than you are able to pay for from existing cash flow!

Rule #2. Be prepared to hold the land for a long enough period of time!

If you adhere to the above rules it would be almost impossible to not make money on a cheap land deal. Robert Morris, however, acquired more land than he could pay for and would have had to sell the land in a very short period of time in order to cover his financial obligations. His precarious finances, together with the Panic of 1796, did him in!

To view cheap land in USA for sale, please click here.

Cheap Land for Sale Versus Expensive Rural Property

Let’s compare very cheap land for sale with the opposite end of the spectrum, very expensive land for sale. The latest Land Report Magazine (Winter 2011) listed the 10 most expensive rural properties for sale in the United States.

The 10 most expensive rural properties ranged in size from 1,750 acres to 55,700 acres and were priced from $1,000 per acre to $100,000 per acre. Total sales prices were $44 million to $175 million. The properties were mainly located in Wyoming, Montana, Colorado, New Mexico, and West Texas.

Who or what establishes the sales price of 1,750 acres near Jackson, Wyoming at $100,000 per acre, or $175 million? Basically, the sales price is determined by what one multimillionaire or billionaire agrees to pay another multimillionaire or billionaire. In other words, it is a very tenuous, somewhat illusionary, market. These properties are purchased with discretionary funds that can easily dry up during economical recessions. Paying $100,000 per acre for 1,750 acres with the expectation of a quick profit would be exceedingly risky. The price could just as easily sink to $60,000 per acre, resulting in a capital loss of $70 million.

Very cheap land for sale, properties selling for $300 to $400 per acre, very seldom, if ever, decline much in value, as they are already priced at the very bottom of the scale. Furthermore, there is safety in the number of people who would have the interest and the financial means to purchase $300 to $400 per acre land. Conversely, how many people in America would have the interest and the financial means to write a check and pay $175 million for 1,750 acres of rural land?

To view very cheap land for sale, please click here.

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How to Make a Profit on Dirt Cheap Land!

If a person can acquire enough dirt cheap land and hang on to it for a long enough period of time, it would be literally impossible to not make a substantial sum of money on the investment. In order to understand this concept better, it would be important to read the fascinating life story of Mr. Jay Cooke.

Jay Cooke was born in 1821 and eventually opened a banking house, Jay Cooke & Co., in Philadelphia. During the Civil War, he was the most prominent financial backer of the northern government and the Union army. He became known as the “Financier of the Civil War.” It was his railroad dealings after the Civil War, however, that made him more of an historical figure.

In the late 1860s, Cooke became involved with the Northern Pacific Railroad. The plan was to build a railroad from Duluth, Minnesota to the Pacific Northwest. Cooke agreed to take over the financing of this enterprise by selling enough bonds, backed by a 50-million-acre land grant provided by the federal government, to pay for the construction of the railroad. If any private individual in American history ever had control over so much dirt cheap land, it was Jay Cooke.

Cooke first personally acquired hundreds of lots in Duluth and then started marketing the railroad bonds all over the United States and Europe. Sadly, the timing was terrible, as the business climate turned cold. The economy was shaken by Jay Gould’s attempt to corner the gold market; a fire broke out in Chicago, leveling three-quarters of the city; another fire soon erupted in Boston, destroying its commercial center; and the Franco-Prussian War ignited in Europe. The financial Panic of 1873 followed, resulting in the collapse of the Jay Cooke & Co. banking empire. Soon thereafter, Jay Cooke went bankrupt.

However, a statement Jay Cooke made several years before proved exceedingly prophetic: “There is not the slightest probability of there being any cessation in the legitimate demand for land unless the world comes to an end.” Well, the world didn’t come to an end and the hundreds of lots Jay Cooke purchased in Duluth back in the late 1860s became very valuable, and he regained substantial wealth. Cooke proved that dirt cheap land will always produce a profit; it’s just a matter of timing!

To view dirt cheap land for sale, please click here.

Where do you find the Cheapest Land for Sale in America

There has been cheap land for sale in America since the Pilgrims landed at Plymouth Rock in 1620. The big variable, of course, is that the word “cheap” meant different prices at different stages in America’s history. The constant factor, however, was that what seemed like a cheap land price in one period in time ALWAYS became substantially higher at a future point in time.

Let’s take a short walk down memory lane regarding some land sales transactions and prices.

  • In 1626 Peter Minuit purchased Manhattan Island from the Indians for $24. There are 23 square miles in Manhattan or a little less than 15,000 acres. Thus the price amounted to approximately 2/10th of one cent per acre.
  • In 1803, President Thomas Jefferson paid Napoleon Bonaparte $15 million for more than 500 million acres of land constituting the Louisiana Purchase. The price was approximately three cents per acre.
  • In 1853, The United States acquired from Mexico almost 19 million acres in southern Arizona, known as the Gadsden Purchase. The price was $10 million, or a little over 50 cents per acre.
  • During the last half of the 19th Century, the railroads were promoting and marketing millions acres of land in the Western states for $1.25 to $2.50 per acre.
  • In the first half of the 20th Century, ranchers, settler, and speculators purchased millions of acres in the Western states for prices ranging from $5 to $25 per acre.
  • In the second half of the 20th Century, some of the same land acquired for $5 to $25 per acre was resold for $25 to $250 per acre.
  • Today, in the first few years of the 21st Century, it is becoming more and more difficult to find tracts of unimproved acreage anywhere in the United States for much less than $500 per acre.

To view some cheap land for sale in America, please click here.

Cheap Land Sales in Rural Areas

Cheap land sales have historically generated opportunities to build substantial personal wealth. The secret to making money from inexpensive land is buying large parcels of low-priced rural land. There is a surprising amount of profitable, cheap land for sale in rural areas of the U.S.

Some land investors make the mistake of looking at the parcel price rather than the price per acre. Like buying items for sale at wholesale prices, buying land in “bulk” is much cheaper and will yield higher profits when resold in smaller parcels.

A great investment in any economy, inexpensive land offers protection against inflation. Just as many wise investors amassed enormous fortunes from property purchased during the Great Depression, property bought at depressed prices during a major recession can yield impressive sale prices when the economy recovers.

Unlike commercial real estate or rental properties, rural acreage is generally a much simpler investment. Although researching local subdivision laws before making a purchase is essential, low-priced rural land is less bogged down by bureaucracy and involves much less risk of property damage.

Rural property often brings other financial advantages. Rights to certain natural resources may be obtained, and sometimes buyers may even elect to engage in cattle-grazing operations. Generating meaningful wealth is still an option for many, even without a business degree or millions to invest. Cheap land sales can help build a nest egg and ensure a bright financial future.

To view cheap land sales, please click here.

Dirt Cheap Land for Sale in the United States?

When people see dirt-cheap land for sale, the first question they usually ask is, “But can the land be used for anything?” Following are just two historical examples to consider.

The Imperial Valley Venture

In the years between 1901 and 1907, the California Development Corporation attempted to build a water canal from the Colorado River westward into California’s Imperial Valley. The goal was to provide a source of irrigation and turn this dry, desolate and uninhabitable area into a subdivision of lush farms. Initially started by private promoters, the project eventually was taken over by the Southern Pacific Railroad with federal support promised by President Teddy Roosevelt. The United States Government owned most of the region and was offering dirt cheap land for sale at $1.25 per acre. The project failed after thousands of acres were sold and millions of dollars lost, and in 1909, the California Development Corporation was liquidated.

So what has happened to these dirt-cheap land prices during the last 100 years in the Imperial Valley? Much of the land is still without water, still desolate and uninhabitable yet it is very difficult today to find land in the Imperial Valley for less than $1,000 per acre.

Interstate Highway 80 in Wyoming

For a more recent example of dirt-cheap land for sale, consider the area along Interstate Highway 80 in Wyoming between the towns of Rock Springs and Rawlins. Local residents refer to the region as “barren and worthless.” Most of the dirt-cheap land for sale in this part of the state is in the checkerboard area (ownership of alternate sections divided between the federal government and private owners), which eliminates development potential. Known as the Red Desert, this area has no power, water, utilities or maintained roads. In 1990, land could have been purchased for as little as $15 per acre.

Today, 20 years later, ownership is still divided between the federal government and private parties, the area still has no power, water, utilities or maintained roads, and the zoning is unchanged. Yet this same “barren and worthless” land now sells for as much as $500 per acre.

If a person is seeking land for a specific use —  such as agriculture, hunting, immediate development, or a site for a retirement cabin with utilities, trees and a creek running through the middle – then dirt-cheap land for sale probably won’t fit these needs. However, dirt-cheap land for sale is an overlooked real estate niche, as a large number of people have an almost innate desire to own such properties. Dirt-cheap land for sale is inexpensive to acquire and very exciting to own, because who can predict, with absolute certainty, future usage or values?

A hundred years ago, there were many popular, prominent stocks that no longer exist. These companies went broke, went out of business or were made obsolete by technology. However every single acre of dirt-cheap land for sale 100 years ago is still here today and is valued at a higher price. The predictable thing about dirt-cheap land for sale in the United States is that it will eventually increase in value as the result of nothing but the passage of time.

To view dirt cheap land for sale CLICK HERE

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Where is the Cheapest Land for Sale?

Buying a large tract of the cheapest land for sale today is one of the simplest, safest and surest methods of achieving greater assets tomorrow.

Let’s review the performance of the cheapest land for sale versus Wall Street, gold and cash, over the last 30 years.

  • From 1981 to the beginning of 2011, the Dow Jones went from 1025 to 11,500. So the Dow Jones is 11 times higher than it was 30 years ago.
  • The price of gold multiplied less than 2 ½ times between 1981 and 2011, from $599 to $1,415.
  • The value of cash decreased dramatically over the last 30 years. According to the U. S. Bureau of Labor Statistics, it takes $2,400 today to purchase the same goods and services that $1,000 purchased 30 years ago.

Now, let’s look at how the value of the cheapest land for sale in the United States has fared over the last 30 years.

  • In 1981, the cheapest land for sale in the United States cost about $10 per acre, and today the cheapest land for sale costs around $180 per acre. The cheapest land for sale today is 18 times higher than it was 30 years ago.

Finally, let’s review the risks associated with other forms of real estate investment.

  • Agricultural land can suffer from a decline in the agricultural business.
  • Apartment buildings can depreciate in value during recessionary times.
  • Commercial properties can become financial sinkholes without paying tenants.
  • Prime developmental land in the middle of a city can sit vacant for years due to zoning difficulties, the lack of bank financing, or a downturn in the economy.

In order to be successful, these investments require intensive management, substantial sums of capital, and advantageous timing – and even then they occasionally fail.

On the other hand, purchasing the cheapest land for sale and doing nothing but holding it for a long period of time is a proven formula for success. Every single acre of the cheapest land for sale that existed 50 years ago is still here today and worth substantially more money.

To view the cheapest land for sale today, CLICK HERE

Where to find Cheap Rural Land for Sale

The most expensive land for sale in the United States is situated in the downtown sections of the larger cities and the least expensive land is located in the outlying rural portions of the nation. The best deals regarding cheap rural land for sale anywhere in the United States of America will be found in the larger Western states: Texas, Wyoming, South Dakota, New Mexico and Nevada. In the remote rural areas of these states land can still be found for prices under $500 per acre.

The advantage of finding cheap rural land for sale is that purchase prices will generally be very reasonable and easy seller financing is usually available. Of the various investments available to people today – rental properties, commercial buildings, business franchises, oil drilling partnerships, commodities, bonds and stocks – cheap rural land is the easiest to acquire, the easiest to maintain and in 25 years from now is the most certain of all the other assets to still be here and to be worth more money than it is today.

Cheap rural land is a finite asset, meaning there are only so many acres available in the United States and there is no way to manufacture more land. The United States of America contains 2.4 billion acres of land and 100 years ago, in the year 1910, the population was 92 million people. That equated to 26 acres per person. Today there are still 2.4 billion acres of land in the United States and the population is 307 million. This now equates to only a little over 7.5 acres per person. Thus is there any doubt but that cheap rural land for sale today will become much more valuable in future years?

As evidence of this inevitable price increase consider that in 1990 cheap rural land in parts of Texas, Wyoming or South Dakota could have been purchased for $50 per acre or less. Today some of that same land is now priced at closer to $500 per acre, an increase of 10 times the 1990 price.

How did the stock market perform over this same period? In 1990 the Dow Jones was 2900 and today it is around 11,000, an increase of approximately 4 times the 1990 price. What about the value of cash over the same period of time? According to the U. S. Bureau of Labor Statistics it takes $167 today to buy the same goods and services that $100 purchased back in 1990. In other words inflation robbed the dollar of 40% of its purchasing power is just 20 years time.

Finding cheap rural land for sale and purchasing under beneficial terms might well be one of the surest and safest methods of building wealth in future years. History has taught us that it is virtually impossible to lose money owning large tracts of rural land if purchased cheap enough and held long enough.

To view cheap rural land for sale CLICK HERE

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How is the Price Per Acre Caculated?

Most of the United States is surveyed into townships that comprise 36 sections of land and measure six miles by six miles. Each section contains 640 acres of land. There are 23,040 acres of land in a township. The overwhelming majority of townships are located in rural areas, and when buying and selling such properties, the monetary unit most generally used is the price per acre.

Conversely, commercial and residential properties in urban areas are generally sold on a square foot basis. If a real estate broker were selling a one-acre commercial property in a large city, he would most likely quote the price as being $10 per square foot—instead of $435,600 per acre (there are 43,560 square feet in an acre, times $10 per square foot).

However, when dealing with rural properties it isn’t practical to quote land prices on the basis of square footage. Imagine the burden of a rancher trying to sell his 3,000 acres to another rancher by quoting a price of one penny per square foot (one penny per square foot translates into a price of $435/acre). Wouldn’t the rancher find it much easier and less confusing to simply state that his ranch is for sale at a price per acre of $435?

Rural banks, country real estate brokers, ranchers, farm credit bureaus, escrow companies, and sellers and buyers all use the acre as the monetary unit for rural acreage prices. Unfortunately, there still can be some subtle deception involved when some real estate brokers insist on listing a sales price and then quoting total acres involved (without separating leased land from deeded land). In other words, a sales price of $1 million might be shown along with a total of 2,500 acres. It would therefore be reasonable to assume that the price per acre was $400 ($1 million divided by 2,500 acres). But upon further investigation, it is revealed that the 2,500 acres includes 2,000 acres leased from the BLM, leaving only 500 deeded acres—drastically changing the price per acre to $2,000!

Click here to view land that you can buy for a cheap price per acre.

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Advantages to Owning Large Acreages of Land

Buying, selling and investing in large acreage can be very exciting and rewarding. There are three inherent advantages to owning large tracts of land, as opposed to smaller lots.

  • First, there is almost an unlimited supply of small lots available for purchase, while large tracts of land are a much rarer commodity.
  • Second, it is very difficult to subdivide a small lot, while large tracts usually can be parceled into smaller parcels, automatically increasing the per-acre price.
  • Third, in order for a small lot to increase in value, there has to be greater demand for usage, while large acreage can increase in value simply as the result of ongoing and inevitable inflation.

In the year 1930, the Dow Jones was 294, and a person could have purchased large tracts of land all over the Western United States for $2 per acre. Today, the Dow Jones is approximately 11,000, representing a value 37 times higher than it was 80 years ago. Yet it would be very difficult today to find land for sale anywhere in the United States for less than $200 per acre, representing a value 100 times higher than it was 80 years ago.

There is another important factor at work here that should not be overlooked. The Dow Jones is a group of companies, but in 1930 there were many individual firms that failed, went bankrupt, or were liquidated and no longer exist. However, every single acre of land that existed in the United States of America in 1930 is still here today and is worth considerably more money.

In order for stocks to increase in value, there has to be ongoing positive performance and greater earnings. Large acreage, however, will gain value simply as the result of inflation and population increase, both of which are inevitable in future years.

According to the U. S. Bureau of Labor Statistics, it took $6,536 in 2010 to purchase the same goods and services that $500 purchased in 1930. That means inflation caused the dollar to lose 92% of its purchasing power over the last 80 years. The population of the United States in 1930 was 127 million people; today it is 317 million and is projected to exceed 400 million by 2040.

In the future, if inflation continues as it has since the founding of the nation; if the population continues to increase as it has since the founding of the nation; and if no one figures out how to make more land –then the only conclusion is that the finite supply of large acreage has to increase in value in future years!

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