The Rural Acreage Game
Raw, undeveloped rural acreage always has been one of the most exciting and overlooked segments of the real estate business. This type of property generally 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 cheaply 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. He 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 development potential), Caffey’s approach is strictly “objective,” (meaning that a 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, including the following:
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 had been 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, Caffey 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 eminently familiar with all aspects of the rural land business including purchase negotiations, installment land sales, 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 embryonic stage and offers spectacular potential.
If you wish to discuss with Caffey directly any rural land opportunities, thoughts or ideas you might have, email doug@CheapLandinAmerica.com or phone (800) 421-7163.
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