Archive for the ‘How to Profit with Land’ Category

Cheap Wyoming Land for Sale

In the late 1800s, the history of Cheap Wyoming land for sale was interwoven with the attempt of British aristocrats to create cattle grazing empires. The British were enamored of the new American cattle industry and the potential of utilizing public rangeland. The appeal lay in the fact that private land wouldn’t have to be purchased. These operations were financed by establishing public companies in England and Scotland, with prominent aristocrats serving on the boards of directors.

In 1878, Moreton Frewen was among the first British aristocrats to arrive in Wyoming. His wife was Winston Churchill’s aunt. Flush with money inherited from his father, he settled in northeastern Wyoming and founded the Powder River Cattle Company. For a few years his company grew rapidly, and he grazed 30,000 head of cattle on the public range.

Horace Plunkett, whose father was Baron Dunsany, founded the Frontier Land and Cattle Company. Plunkett’s grazing operations were also quite profitable in the early years. Again, however, instead of buying private land, he relied on free, open rangeland.

British investors started dozens of other cattle companies, but the largest was the Swan Land & Cattle Company, organized by Scottish bankers in 1883. Initial capitalization included almost 100,000 head of cattle and approximately 500,000 acres.

The profitability of these ranches in the early years was astonishing. A three-year-old steer cost $10 to raise and would bring $30 at market. Overall, the annual ROI ran between 20% and 40%. Such financial results made a strong impression on stockholders back in the British Isles.

Within a few short years, however, hard times arrived.

  • First, the open range became overcrowded and uneconomical.
  • Second, the extreme winter of 1886-87 depleted the herds.
  • Third, the marker price for beef cattle declined.

The moral of this story is that business cycles—and cattle—come and go, but land lasts forever and always increases in value through the years. So the British aristocrats should have put their money in private Cheap Wyoming land for sale, instead of relying on free rangeland.

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Protecting Yourself Against Hyperinflation

What exactly is hyperinflation? In a nutshell, it is a massive and rapid increase in the amount of money available that is not supported by a corresponding growth in the amount of goods and services. In other words, there is an imbalance between supply and demand for paper money. Given these facts, how can one protect against hyperinflation?

The most important thing is to take advantage of the above formula and exchange depreciating paper money for increasing finite assets. What are finite assets? One the most common finite asset would be raw land. The government can print trillions of new dollars, but it can’t print one acre of new land.

So let’s provide a simple example of how buying raw land would protect against hyperinflation.

Let’s take the case of two hypothetical people, Mr. Jones and Mr. Smith. Mr. Jones has $1 million cash in the bank and he uses this cash to purchase 2,500 acres for $400 per acre. Mr. Smith also has $1 million in the bank, but he elects to leave it there. Thereafter, let’s suppose, for illustrative purpose only, that the federal government prints enough new dollars to match all the existing dollars currently in circulation.

What does all of this mean?

It means that being as there is now twice as many paper dollars available, the value of previous dollars are worth half of what they used to be. It also means that since no new land was created, the same amount of land still exists. Therefore, if there are twice as many dollars to buy the same finite supply of land, that land will sell for twice as many dollars as it did previously.

The end result for Mr. Smith is that he still has his $1 million cash in the bank, but it is only worth (in buying power of goods and services) one-half of what it was before the government printed the new dollars. Mr. Jones, however, had 2,500 acres worth $800 per acre, or $2 million. Mr. Jones knew how to protect against hyperinflation by exchanging his dollars into an asset that the government couldn’t reproduce.

To view land that can be used to protect against hyperinflation, click here.

Buying Land for Investment

Buying land for investment has never been easier. With large tracts of cheap land available in the United States, anyone hoping to invest in land can do it for a low cost. Some of the very best deals can be found in Wyoming, Texas, Oklahoma and South Dakota. Many of the parcels sold in these states are considered wise investments for several reasons.

Most individuals who have bought land for investment have not been disappointed. Purchasing cheap land has given many the opportunity to increase their investment just by holding onto the land for a long period of time. By doing this, investors can take advantage of the fact that inflation takes over and increases the value of the land as time goes by. The good thing about time is that it never ceases moving forward. This means that the value of land will always increase, especially if it is purchased at a cheap price.

The cheapest land in America does not have any amenities. The land is raw, but for many, it has been a great investment time and time again. Occasionally, in the past, owners of land like this have been approached by public and private organizations hoping to purchase their land.

Some cheap land is neighbored by government properties. The government owns large amounts of cheap land, as do many private organizations. Large development projects headed by public or private organizations could require the purchase of land close to privately owned cheap land. When that happens, the adjoining cheap land can appreciate in value quite rapidly. This is not always the case, but it is one of the best-case scenarios for those who are buying land for investment.

If you are interested in buying land for investment, please click here.

Land as an Investment is Always Profitable

Land as an investment can be a marvelous and amazing process to behold. In the beginning, there is no crystal ball that can predict with absolute certainty what the future will bring. Consider the following two examples—both ultimately profitable—that began almost 100 years ago.

In 1917, Utah rancher Thomas L. Williams purchased 140 acres north of Las Vegas for $8 per acre and subdivided 100 of the acres in 79 lots. This was the beginning of the town of North Las Vegas. Williams eventually sold all of his lots to residents who liked the idea of no taxes, no building restrictions, and no license requirements. With the coming of Prohibition in the 1920s, he sold quite a few lots to bootleggers who built their homes over basements containing stills.

When the Hoover Dam was constructed during the 1930s, it brought new prosperity to the region. After World War II, in the late 1940s, the gambling industry began to develop. Thereafter, Las Vegas and its surrounding suburbs developed into a multibillion-dollar mecca of glittering resorts, attracting many millions of tourists annually.

And what would Mr. Williams’ 140 acres, which he purchased for $1,120 back in 1917, be worth today? Try around $50 million.

The second example would be a 50,000-acre ranch located in the middle of Nevada, also purchased in the same year of 1917 for $1 per acre. Unlike Mr. Williams’ 140 acres next to Las Vegas, during the ensuing years, absolutely nothing developed near this ranch. Very few new residents arrived, no casinos, shopping centers, or housing developments were built, no new roads were constructed—in fact, the ranch is still being used today to graze cattle, just as it was back in 1917.

So what is the 50,000 acres worth today? It is worth around $10 million.

What is the moral of this little analogy? Mainly that land as an investment—assuming it is purchased cheaply enough and held long enough—will always be profitable. The only variable will be the magnitude of profitability.

To view land as an investment, please click here.

The Best Hedge Against Inflation

In broad economic terms, inflation is the devaluing of purchasing power due to an increased influx of printed currency. A hedge is an investment opportunity that can help shield a person against such economic instability. Typically, hedges are things that have a finite supply. Stocks, bonds, automobiles, machinery, equipment, and even food, would make poor hedges, because all of these items can readily be reproduced and can easily become perishable. On the other hand, an asset such as land would make the best hedge against inflation because no one can make any more of it, and it isn’t perishable.

Since the founding of our nation 235 years ago, raw land, as a dependable financial asset, has withstood the test of time. As a prime example, let’s suppose Ben Franklin, in 1776, had placed $10,000 of freshly printed currency in one safe deposit box in Philadelphia; and in another safe deposit box he place a deed for 10,000 acres that were located somewhere in the “wilderness.” Today, the $10,000 in 1776 currency would be practically worthless (inflation over 235 years would have destroyed most of its buying power), yet the 10,000 acres, depending on their exact location, would be worth millions of dollars.

Small residential rental properties (single-family homes and duplexes) can also serve as an investment hedge, but there are many potential liabilities involved. Tenants can cause serious damage; maintenance can be quite high; property taxes and insurance can eat into profits; and in a serious recession tenants can move out and the income ceases.

In summary, perhaps the very best hedge against inflation would be to simply acquire a large tract of cheaply price land in the “boondocks” and wait, wait and wait!

To view land that would serve as the best hedge against inflation, please click here.

Hedge Against Hyperinflation

Inflation and hyperinflation is basically the same thing; it’s just a matter of degree. Inflation has been occurring in the United States since the founding of the nation in 1776. One example of hyperinflation would be what happened in Germany in the 1920s, when a cup of coffee cost the equivalent of $100. Today, it is important for everyone to understand how to hedge against hyperinflation.

First, let’s review the history of inflation in the United States over the last 50 years. Fifty years ago, in 1961, $1,000 purchased $1,000 worth of goods and services. Today, however, according to the U.S. Bureau of Labor Statistics, it takes $7,500 to purchase the same goods and services that $1,000 purchased 50 years ago. That means that over the last 50 years, the U.S. dollar has lost approximately 87% of its purchasing power.

What caused the U.S. dollar to depreciate so much in value? This inflation occurred because the federal government printed new U.S. dollars faster that the corresponding growth of new goods and services.

How can a person hedge against hyperinflation? Simply by exchanging dollars—that the federal government will forever be printing more of—for finite assets, such as land, that can’t be reproduced. For a simple example, assume a person has $50,000 in the bank. Every time the federal government prints more dollars, the existing dollars in circulation become worth less and less. Conversely, let’s assume the person exchanged the $50,000 in cash for 1,000 acres of land. In this case, every time the federal government prints new dollars, the 1,000 acres become worth more and more (because land is a fixed supply and the government couldn’t create new land in the same equivalent supply as it created new dollars).

Every American citizen needs to understand how to hedge against hyperinflation—especially during a time when the federal government is committed to printing and spending trillions of new dollars (in order to service a huge and growing national debt)!

TTo view land that can be used as a hedge against hyperinflation, please click here.

5 Popular Land Investment Strategies

Through the years, many land investment strategies have been utilized in an attempt to pick winning land deals and maximize profit potentials. Following are a few of the more popular strategies employed.

  1. Growth Patterns—analyze growth patterns of large and expanding cities like Phoenix, Albuquerque, San Diego, Los Angeles, Las Vegas, etc. Then acquire land in the path of the strongest direction of growth and wait. If the timing is good, this strategy can work; if not, it can fail.
  2. Pre-Development—A slight modification of the above. Find an existing housing development in any small city and purchase the adjoining land. Wait for developers, seeking to build more homes, to knock on your door. If the timing is good, this strategy can work; if not, it can fail.
  3. Entitlement Deals—Locate a suitable tract of land, apply for a zone change, put in utilities, build roads, and develop lots for residential purposes. Then sell the lots to small builders. If the timing is good, this strategy can work; if not, it can fail.
  4. Creating New Cities—Acquire thousands of acres and build an entirely new city, starting from scratch. In the 1950s, Nate Mendelsohn acquired 80,000 acres located in the desert 50 miles north of Los Angeles and began developing California City. Another example would be Lake Las Vegas. In the early 1990s, development began on this new city located about 30 miles outside Las Vegas. This strategy takes many years and millions of dollars to unfold. And almost invariably, the original developers don’t make any money.
  5. Just Buy the Cheapest Land Available—Ignore location, growth patterns, and don’t spend any money developing anything. Be governed solely by the lowest possible per-acre price you can find. Buy a large tract of extremely cheap per-acre land, and simply hang on to it for a long enough time. Unlike the other four land investment strategies outlined above, it is virtually impossible to lose money with this strategy.

In summary, of the land investment strategies outlined above, the last one is the simplest, has the fewest “moving parts,” and is the only one that relies on nothing but the passage of time!

To view land investment strategies based solely on cheap land, please click here.

The Best Way to Invest in Land?

How does a person invest in land? There are quite a few approaches available. One approach would be to hire an expensive real estate land planning and research firm for the purpose of trying to identify properties that can be rezoned and developed. Another method might be to find a tract of land 10 or 15 miles from a city and hope that the path of growth will be in that direction. Still another way would be to have a knowledgeable real estate broker notify you of good deals when they become available.

Unfortunately, the above methods can be quite complex and usually will be subject to conditions beyond your control—such as the state of the economy, the politics of rezoning, the direction of growth, availability of capital for development, and so on.

Isn’t there an easier, surer method? Yes, there is—a method so easy that even the most sophisticated real estate investors (in fact, especially the most sophisticated) fail to recognize it.

This method involves simply purchasing some of the cheapest per-acre priced land available for sale anywhere in the United States—and then forgetting about it for the next decade or two. While this might appear quite boring, in the end it would be almost impossible not to achieve a substantial profit. And isn’t that what the goal is?

A lot of self-anointed “experts” try to sell books and study courses on how to invest in land, yet most of these folks don’t have a clue themselves. If they did, wouldn’t it make more sense for them to follow their own advice and make a lot of money just doing it, instead of trying to sell you a book?

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Advantages to Buying, Selling and Investing in Large Acreage

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, whilelarge 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 acreagecan 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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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.