What do we do with the land we buy?

We get this question sometimes, and I love to tell people about the different aspects of land investing, and how we go about it. I was in the existing homes business for many years. Houses are easy. Banks willing to make home loans for people to buy houses are everywhere, and many of the mortgage products are insured from risk by the government. But this is not the case with raw land.

Rural Raw Land:

First, we are not developers. We do not develop any of the raw rural land we buy. We make minor improvements such as access installation or cleanup, tree clearing for home sites, well and septic installation or repair, fencing repair or installation, trail creation or clearing, and other minor items. Some of the land we buy has been left to overgrow and is sometimes inaccessible. We work to bring that land back to life so someone can enjoy it once again. Otherwise, we try to leave the land in it’s pristine natural condition.

I noticed immediately that the land business was much different when I first started in the business. It’s almost like an exclusive club. There were many people whom want to own land, either for recreational, agricultural, or residential purposes, their own piece of heaven on earth. But there was one major problem: Even though there is high demand for raw land, unless the Seller is willing to finance the purchase, or the Buyer pays cash, land ownership is simply out of reach for the majority of people. Banks just don’t typically make loans for land. And this as a result makes land a very inefficient market.

But we stepped in to make land and financing available to great Americans whom want that dream. We used our contacts and years-long relationships in private finance from many successful years in the house business to breathe new life into the land business. We buy land and finance it in house to make the dream of land ownership a reality for many people whom would otherwise not be able to afford it. That’s our business model. Working with both landowners and land buyers every day, we love to help you as the landowner turn your unwanted land into cash that you can put to better use elsewhere. And we love working with land buyers to help their vision come to life with that new piece of land.

And we help our private investment partners, many of whom are just regular people investing excess savings for retirement, enjoy a better return on their money than they can get anywhere else. It really is a win for everyone involved. And that’s why I love working with rural land.

City Infill Lots:

We are home builders too. We don’t develop entire housing additions. We prefer building where the land is already ready to build, and that is usually found in the inner city core. This is a much more efficient use of available resources, since these lots are largely ready to build on. We get many of our vacant lots from county tax sales. But there are only so many available to buy every year. So we also work with private owners to buy vacant lots to meet the demand of the housing market.

We also partner or trade with other builders. Builders are busy people, so acquiring new lots to build homes on is always challenging. But we love to work with smaller mom-and-pop builders to supply them with buildable lots so they can grow their businesses. We do this by partnering with them in providing the lots, and they do the building. We also trade with them, lots for finished homes. We can’t build on all the lots we buy, so we make them available at times as packages to builders that need them through strategic partnerships or trades, making it a win for all involved.

Since we build houses too, we understand that there is a shortage of buildable sites available. Indeed, the country is currently facing a massive housing shortage. Demand for homes is high, but just the entitlements process alone causes new housing developments to take years just to get off the ground. Also, the majority of buildable lots are developed by a handful of large development companies. And sometimes building in those new housing additions is an exclusive club for a select few builders.

But building on inner city infill lots is a great way for smaller mom-and-pop builders to get their foot in the door. And the benefits of building on infill lots are many:

• They’re already developed, so the entitlements process can be skipped
• Permitting is faster and more efficient
• Lot splits can increase the number of homes to be built if the lot qualifies
• Utilities are usually already available
• Access to existing infrastructure such as roads, schools, shopping, and emergency services are present or nearby already
• Reduced urban sprawl
• Land conservation in undeveloped areas
• Reduced environmental impact by minimizing the need for new costly energy expansions
• Cost saving due to efficiency can be passed on to the new homeowners
• Revitalizes neighborhoods and raises values of existing homes

Of course, there are also challenges with building on city infill lots. Profit margins are smaller many times. The cost to build is usually a fixed cost, while the sale price can vary depending on market sales for the neighborhood. It costs the same to build an 1800 sq ft home regardless of the neighborhood. But some neighborhoods command a lower price, which thins builder margins. Also time on market. The longer the house sits on the market, the more the holding costs eat into the builder’s profits. This is the case with some neighborhoods where sales are slower. So it can be challenging to build and sell at a profit if the neighborhood has a less-developed housing market.

If you have an infill lot that you no longer want, call or text us anytime for a free quote. Or simply fill out the form below. We’d love to work with you on your vacant lot to get you cash quickly.

Spirit Land Company is based in Moore, OK. However, we are currently buying properties throughout Oklahoma, Kansas, Indiana, Tennessee, Nebraska, Texas, Missouri, Georgia, Mississippi, Alabama, and Arkansas.

Call Us Anytime! (405) 355-3500