Owning real estate properties is not for everyone. It requires a plethora of different skills that many people do not feel comfortable using. It will take management ability, people skills, and financial education. However, real estate is probably the fastest, most accessible wealth generator for the average person.
So many people want all the benefits of owning real estate properties but without owning real estate properties. That leaves only one other option, owning LAND. Land can have all the benefits of owning real estate- income, appreciation, and leverage.
Buying land can be a little more tricky than real estate. Sure, you can visit any real estate website and pull down a Multiple Listing Service (MLS) listing and pay full price. But where is the fun in that? Also, searching for low-cost land is how you make a profit from owning land. Remember you make your profit when buying, not selling.
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The technique for buying land. We want to use this technique for buying all of our land. Once you get land at an extreme discount, then you can use the below methods to make a ton of money off of it. Please read the book “Dirt Rich” for full details on how to buy land at extreme discounts.
The basic jest of getting land for a discount consists of obtaining a list of past-due property taxes on land. You send offers to buy the land at a discount. If you price everything fairly, you should get a 3-5% return on accepted offers. You proceed to conduct your due diligence on the land and transfer the title.
It sounds simple, but it is an art form. Please, I recommend buying the book to get a handle on the whole process. I believe that is highly possible to make this process work for you. It takes time, patience, and consistency.
Now that you have the land, it is time to become a millionaire. There are five methods we can use to generate income from our land. They are flipping, dividing, harvesting, holding, and farming. Let’s break each of these down to get further clarification.
Flipping. Flipping your land consists of buying your land at a discount. The goal is to buy land at 25% of its estimated retail price. Once you have obtained the land, you then put it up for sale on a land website or Craigslist. Not only do you put it for sale at full retail price, but you also offer seller-financing. This means that they will repa you over time, instead of taking a bank loan. You will keep the interest payments for yourself. You are creating passive income in the form of real estate land notes. You can also sell the notes for cash to other investors. Flipping is a good way to get in and get out of the ownership of land.
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Dividing. Dividing is more complex than flipping but can be more lucrative. The process is similar until you purchase the land. Once you own the land you will divide the land up into different parcels. You will then mold the land to be traveled and built upon. You can even add easements, power, and septic, if it will command higher premiums. Now, you can charge much more for each of the land slices. Say you buy 10 acres, divide them, and improve them. By the time you sell all the different parcels, you will probably end up with 10 times the profit. This method takes more time and effort but with greater reward.
Harvesting. Harvesting involves buying cheap land. However, you are going to hold the land and sell the rights for someone to come in harvest the trees. Usually, they will harvest 25% of your land at a time so that you will have a steady flow of income. If you have enough properties, you can stagger the harvesting to always have income flowing in. This requires very minimal effort on your end. You basically just pay the property taxes and sign contracts with the operators.
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Holding. As you start sending out your mailers, you will accumulate a ton of land. Some land may be valuable if you hold it. This will take learning the future of the area that the land is in. If you receive word that an interstate, highway, or community is going to be built in an area, you can hold the land until someone comes knocking on your door. You will have to pay property taxes while you wait, however, when someone comes knocking on your door, you are in the driver’s seat for negotiations.
Farming. Similar to harvesting is farming. You are passively holding the land while others pay to operate it. This can be very lucrative. Your job is to find cheap land- which may be hard because farmland always comes at a premium. It is worth the price because of the near completely passive income once you have it. Farming is for thouse who want consistent passive income.
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Using a combination of these method can make you a millionaire. The trick is to stay consistent and build a technique that can be repeated over and over. In the book “Dirt Rich”, the author talks about automating his entire process. In the end, that is what is going to make you a millionaire. Finding, mailing, purchasing, and selling your land automatically. If you can create a process, or copy someone else’s, you can do this while you sleep. That is the overall process of becoming rich for any method- earning money while you sleep.
Which of these methods interests you the most? Would you consider owning land? Let me know what you think in the comments below. Also, please leave a like if you enjoyed this not often talked about method of building wealth.
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Disclosure: I am not a financial advisor or money manager, and any knowledge is given as guidance and not direct actionable investment advice. I am an Amazon Affiliate. Please research any investment vehicles that are being considered. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
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