Tuesday, December 13, 2011

Failed Exchanges – Safe Harbor and Options

We found information regarding 1031 exchanges and tax obligations on an exchange between two calendar years. Typically we have found that the Internal Revenue Service ("IRS") will not challenge or disqualify a 1031 Exchange transaction as long as the investor has followed the Safe Harbor provisions or guidelines provided by the Treasury Regulations. What this means is to use a qualified 1031 intermediary who will hold the sales proceeds until a like kind property is located, so the sale proceeds never actually reached your account. If you do a 1031 by yourself and receive the funds from the sold property then you still may have an option on when to account for the taxes.

If an exchange fails, funds are returned to the investor and taxes are owed. But if a failed exchange runs over two different calendar years, investors may have an option on when to pay taxes. Let’s say the sold property closes escrow on December 1, 2011 and as of the 45th day of the exchange, the investor has not found a replacement property so the the exchange is now cancelled. The sale proceeds from the sold property must then be returned to the investor in January 2012 whic is the 46th day of the exchange. The investor has the option to recognize the tax liability either in 2011 or 2012. The investor sold the property in 2011, but they had the right to the benefit in 2012. The investor should contact their accountant for the best option, but this scenario does provide such an option.

Thursday, December 1, 2011

First Solar Inc. Teaming Up With NRG Energy on Alpine Solar Project in Lancaster, Ca.

NRG Solar, is building the 66 megawatt (MW) Alpine Solar Project in Lancaster, Ca. and it will be the first large scale project built in LA County, and the largest photovoltaic facility in the State of California. First Solar will handle the construction, operation and maintenance services. The electricity from this project will be bought over a 20 year purchases agreement with PG&E. The expectation is that 250 jobs will be created in the construction phase, and it plans to begin by the end of 2011 and complete by 2012.
According to numerous news sources and press releases this project will be on disturbed land which means mainly previously farmed land. It will also be near a SoCal Edison electric distribution system. Based on the description it looks to be in Antelope Valley’s west side perhaps somewhere near AVSolarRanchOne or Tuusso Energy’s site.
Once we know more about this sites location we will post it here.

Tuesday, November 15, 2011

The Southern California Water Solution Maybe in the Desert, Which Could Increase the Price of your Investment Land

The original article was reported by Noaki Schwartz and Garance Burke of the Associated Press.

In the Mojave Desert east of Needles, Ca. in San Bernardo County is a place called Cadiz, Ca. It seems more like a location for a Clint Eastwood western as it is a desolate dry hot desert, but there maybe an oasis of water here just south of route 66. According to reports this oasis has tall green trees with lemons, and grape vines awaiting harvest.

A private water company indicates beneath the 35,000 acres Cadiz ranch is an aquifer with enough water for 400,000 homes. They indicate that this water comes originally from springs above in the Desert Mountains and settles in Cadiz and eventually resurfaces in dusty lake beds dozens of miles away where it evaporates in the hot desert.
A proposal to tap this water supply was rejected several years ago, but their new plan is to drill thirty four wells, and then pipe the water along the railroad line that currently exits.

Environmentalists say that this will impact the desert tortoise, bighorn sheep, Joshua trees and other plants and animals. Conversationalists say the aquifer is not as large as the company indicates, and even others say removing so much water annually will not allow the aquifer to recharge itself with limited annual rainfall. The debate will continue, but to us if the water is simply evaporating then a balance between man and nature maybe able to be made. Former Gov. Arnold Schwarzenegger has called the proposal "a path-breaking, new, sustainable groundwater conservation and storage project," when the prior proposal was made years ago.

According to the Associated Press, since 2010, the Santa Margarita Water District, Three Valleys Water District, Golden State Water Company, Suburban Water Systems and Jurupa Community Services District entered into agreements with Cadiz to receive water. These agencies supply water to parts of Los Angeles County, Orange County, Riverside County and eastern San Gabriel Valley.

Now 400,000 homes will only serve a fraction of the water needs of Southern California, but it is enough to serve Lancaster and Palmdale, Ca. or Victorville’s current populations. We will see if the recent proposal will gather enough steam to flow water down to the Antelope Valley and onto farmland and homes instead of evaporating into dry air. Certainly, a future water solution will allow the High Desert areas to grow much like Arizona has.

Tuesday, November 1, 2011

General Probate Procedure for Real Property in California

An estate of less than $100,000 which doesn’t include real property (real estate) can be done as a mini-probate. According to attorney’s we are familiar with, it simply needs an affidavit of death, and a declaration with a description of the assets.

A Probate proceeding is necessary whenever a decease person has left assets which have not been placed in a trust or a joint tenancy before death. An estate value of less than $100,000 doesn’t have to go through a full probate proceeding. Also if the real estate is under $100,000 there is a special "small estates" procedure that heirs can use under California probate code section 13151. A full probate can take seven months or more and use up capital in legal fees, and court costs. A small probate would take two months and can be done for $1500 to $2500 with most attorneys in California. It can be a little different when assets include real estate.
In Real Estate Probate, If the property is appraised as having a value of less than $20,000 it can be taken by affidavit, which can even be done without an attorney. However, as recommended by attorneys, if the estate is worth less than $100,000 and the real property is worth more than $20,000, you will need to petition the court. If you choose to tackle a probate on your own in order to save the $1500 to $2500 legal and court fees then you may need to get into some reading such as How to Probate an Estate in California by Julia Nissley. It does come recommended via online book stores. Typically asking questions of court clerks will likely get a reply of “I can’t tell you, I am not the Judge”. Also, forget about seeing the judge.
You can likely save yourself anguish and heartache by seeking the advice of an attorney, so you essentially get a third party to handle your family affairs. We do recommend that you handle the probate as soon as possible. If you wait until you get an offer on your property it will takes months to complete the probate and the buyer may move onto other opportunities.

Wednesday, October 12, 2011

Reverse 1031 Exchange: To Buy Before you Sell

n a standard 1031 Exchange a property is sold and then replacement property is acquired. If you locate a property you want but have not sold a property you currently own then a reverse 1031 could be advantageous. This is not a common in practice but has been done by investors. Some common reasons to do a reverse exchange is you have located a property you want based on price, location, zoning or other reason, but you need to act now in order to buy this property. Not a problem simple purchase this new property and begin the process of a reverse 1031 exchange.

Another reason is that many investors have been caught in the middle by not locating an exchange property in the 45 days to identify and 180 days to close timeframe. Locking up that exchange property in advance solve this dilemma for investors, and it may be easier for you to sell your current property than to locate a replacement property. In a slow real estate market it actually maybe harder to sell your current property and easier to get the replacement, especially, if the replacement property is at a low price and ideal location.

Acquiring replacement property first in a Reverse 1031 Exchange can cause some difficulties though. Since you have not sold your current property then you need the deposit funds for the new property. The biggest obstacle is that the two properties can’t be owned at the same time. In theory, an exchange is going from one property to another, so title to the new property and the old property can not be held at the same time. You will need to get a Reverse Exchange Asset Company to act as a straw buyer for the replacement property. You still must adhere to the 45 and 180 day rule as well.
So in a Reverse Exchange the property that will be sold to complete the exchange must be named by day 45 and it must close escrow on or before day 180.

Locating a reputable 1031 exchange company is the key in this manner, as they will act as the straw buyer. We at vacantlanddeals.com have a number of low priced properties that will be ideal buying opportunities. You can buy one of our industrial or residential low priced properties and sell your agricultural land parcels that you may have bought at the height of the market. It is an ideal time to take advantage of lower price Lancaster and Palmdale land, and we have inventory currently that can fit a reverse 1031 exchange.

Sunday, October 2, 2011

US Topco Energy Inc. of Taiwan Furthers Solar Relationship with the City of Lancaster

The city of Lancaster press release earlier this summer regarding the Topco partnership where Mayor R. Rex Parris remarked “Great partnerships such as these are vital as Lancaster strives to further our goal of becoming the solar energy capital of the world.”

According the city of Lancaster press releases and AVPress earlier this year, Lancaster residents consume an estimated 200 million kilowatt-hours of electrical power a year. City Council members approved an original memorandum of understanding with TopCo Energy for a photovoltaic solar power plant on April 12. That original agreement was aimed at developing one or more photovoltaic solar power plants "capable of generating at least 50 megawatts of electrical power," city officials reported.
The amended agreement signed in July increases the size from 50 megawatts "to a total aggregate of up to 200 megawatts of electrical power." The goal of Lancaster is to become a net-zero energy city, so partnerships like this with Topco will further enable that goal. Through agreements like this the city of Lancaster will generate more power than they need and so can resell excess power to Southern California Edison for regional consumption.

According to Us Topco Energy Inc. website they produce a line of service that includes the planning and establishment of solar power plants ranging from 500kW to 50mW to various new and retrofit commercial and residential constructions. Topco is at least one of twelve solar companies that are using the power of the sun in Lancaster and Antelope Valley to establish solar facilities for the production of energy for the region and state.

In our opinion this is all good news to the land investor as the cities of Lancaster and Palmdale will not only grow with urban growth with the continual population explosion in this region. They can also continue to grow economically with the power of the sun and wind in the region. The city of Lancaster should be commended for taking advantage of new solar technology and the large amount of vacant land and open space. Investors should take advantage of this growth and invest in Antelope Valley land as its future is on the rise, while the stock market is on the wane. Contact VacantLandDeals.com today and invest if low risk land banking.

Tuesday, September 20, 2011

Buying Low and Selling High in the California Land Market

Our headline is common knowledge on how to be profitable in any trading business from stocks, bonds, real estate and even pawn shops. We think it is not common enough in real estate. The recently burst real estate bubble was the highest percentage wise drop in value the last twenty years. Nobody knows where the top or the bottom of any market will be, but the clear signs are when demand outstrips supply. Essentially when it is a sellers market it is not conducive for long term profits for the buyer, especially when there are ten or more offers on the same property. We recall back in 2006 when one fairly modest home had thirty offers within the first week. Housing wasn’t necessarily scarce, but loans were too abundant. It is easy to see the bubble after it pops, but how can you buy at the lower end of the market? When it is the right time to buy? Most people shop for consumer goods when there is a sale. The merchant has too much inventory and they need to make room for new products. You can look at it the same way in buying land or a home.

Ideal ways to buy low priced California land is via a probate sale, bankruptcy, foreclosure, or even short sales. Many of these types of sales are found on the MLS (multiple listing services) as it is the main way for lenders, banks, courts, lawyers and brokers to broadly promote the property. By law government agencies and licensed professionals must market property to the widest public. You can also locate these court filings at your local court house. They are all within the public record. It will take some research and time, but it can be fruitful. The time and effort to research and buy at these court ordered sales maybe too time consuming, so you can look for firms that resell these properties. We at vacantlanddeals.com also buy land via probate and bankruptcy sales. We buy as low as possible, and resell at low retail costs. We currently have a number of properties that are priced at the low end of the market on our website www.vacantlanddeals.com The land prices today are some of the lowest prices in the last fifteen years. Real Estate is very cyclical, so be prudent and buy at the low end of the cycle.

Thursday, September 1, 2011

First Solar’s AVSolarRanchOne to begin Construction near Lancaster, Ca. Albeit some Objections

Excerpts from Patric Hedlund The Mountain Enterprise

Forbes Magazine has named First Solar the fastest growing technology company for two years running. First Solar is an $11 billion corporation, and it has a large operation proposed in Antelope Valley’s Fairmount Butte. They have a $215 federal incentive to commence building AVSolarRanchOne by September 1. It will be a 230 megawatt system on 2100 acres and employ 300 during the construction faze.

According to the Mountain Enterprise news reports as of August 1st First Solar’s AV RanchOne has received final discretionary permits which allow them to mobilize for construction. Mobilization primarily consists of bringing temporary facilities and infrastructure onto the site (temporary construction offices and utilities) to support the start of construction. With this permitting approval, they are released to begin mobilization at any time. They expect to commence construction activities by the September decline.

Yet, there is resistance and obstruction from residences and government agencies. The resistance from local residents in Antelope Valley is primarily that they have not been fully informed. There was even a threat to file a restraining order to stop construction, but that was tabled. There is similar objection in Tehachapi, Ca to the Alta Wind Energy Center in Tehachapi, Ca. as there will be thousands of wind towers going up in the next year. There are approximately 2000 residents in Fairmount Butt area which is about 15 mile west of Lancaster, Ca. yet they have a voice to in this large solar facility construction. Additionally, there is a proposal by Riverside County Supervisor John Benoit to introduce a two percent franchise fee for First Solar installation planned in Riverside County and that motion is pending. It could produce revenues of $3.5 million a year for Riverside County. There are indications from First Solar that they would not agree to pay that fee.

Most Californian’s would agree that alternative energy is essential for the State’s future growth and energy needs, but nobody wants a facility in their neighborhood. We think the project will prevail despite objections, and potential additional government taxes. This will invariably increase vacant land property values in the long term, as solar site assume a large amount of property. Buying low in this current market and holding long term for future growth is still a sound business and personal investment. Go to vacantlanddeals.com for land opportunities.

Thursday, August 11, 2011

Tehachapi California Wind Energy Explosion and Conflict with Property Owners

Wind Turbines are multiplying at an immense pace as wind developers expand, because of the high winds that thrust through the Tehachapi Mountain range. Kern County has the highest concentration of wind farms in the nation at this point eclipsing the Altamont pass in Northern California.

Terra-Gen Power is planning hundreds and maybe thousands of wind turbines for its Alta Wind Energy Center, while, Helo Energy is planning to build 450 wind turbines. This green energy expansion is creating resistance from local residents. There are thousands of wind turbines today in the Tehachapi Valley already. They currently dominate the landscape, so thousands of additional towers will continue to change the views.

There are a number of activist groups galvanizing to try to halt the expansion. They complain of the issues with potential land erosion because of the removal of trees, the environmental impact to bird life. It is the never ending loss of beautiful views that the area is known for. It is a similar complaint of any rural destruction; we want development, but not here. According to the LA Times article by year’s end $2.2 billion will be put into the Kern County economy and the Alta Project will inject $30 million in taxes. Those are jobs the area does want, and revenues for the county and state governments.

We feel for the local residents as there community has changed and will continue to do so. There home prices may also be affected, as less people will want to live in the area. This area is full of rolling hills and mountains, with ranches and livestock grazing. It certainly is an ideal area for wind energy productions as the terrain creates a natural and continual gust of free energy. Land owners have benefited greatly as they can lease their ranch land and it still allows cattle to graze. Most of this area has been unused rural and vacant land, but no more.

There is a give and take with development, and in this case green development. We don’t think the locals will win, as the California’s State government is fully behind it. Governor Schwarzenegger signed executive order S-21-09 under AB32 giving authority to the bill to enforce 33% of the States energy to come from renewable sources. Senate Bill X1-2 signed by Governor Brown codified 33% by 2020.

This infusion of over 2 billion in development, jobs and Kern County tax revenue is a green boom to the area. It also shows that buying land and waiting for development even in rural areas like Tehachapi can be a profitable venture.

Monday, August 1, 2011

BYD Ltd Electric’s Technology for Los Angeles County and Lancaster California’s Jobs Future

The city of Lancaster and BYD (Build Your Dreams) has been in discussion since early last year for a potential electric car manufacturing plant in Lancaster Ca. The city sent a delegation to China for that purpose in 2010. BYD manufactures an electric crossover vehicle called the e6 electric and said it expected to start selling the car in the U.S. The city of Lancaster would like BYD to manufacture and assemble this vehicle and others in Antelope Valley. Also, during the Schwarzenegger administration there was talk of the city of Los Angeles pledging to buy BYD manufactured electric buses if the plant was based in LA County. BYD has yet to make any formal announcements regarding their plans. Although, they have established a US headquarters in the city of Los Angeles, and expect up to 2000 employees over time to administer their US operations in their downtown Los Angeles location.
They further set up roots by establishing a collaborative partnership to develop a grid-scale battery project for renewable energy storage with the Los Angeles Department of Water and Power (LADWP) last year. Also, about a year ago the City of Lancaster, BYD and KB Home announced the completion of a new earth-friendly prototype home utilizing BYD’s solar, battery and LED Lighting systems. The plan is to potentially lead to more affordable solar electricity and energy storage options for homeowners. The city accelerated the development process through the planning department, so KB and BYD could construct the prototype home immediately. The manufacturing and assembly of electric cars and buses would certainly be a boom for the city of Lancaster and Los Angeles County; as such a move would create jobs and future growth to a city that was damaged by the housing crisis.
BYD was founded by Wang Chuan-Fu in 1995 in Shenzhen, China. He is a chemist and part of the Chinese Dream as he raised $300,000 from relatives to manufacture rechargeable batteries. Since then BYD has become one of the world’s largest manufacturers of cell-phone batteries. They have also raised $250 million from Warren Buffet toward their e6 vehicle. They plan on manufacturing 800,000 e6 cars powered by lithium-ion batteries, where they indicate they intend to start selling the e6 in the US at a price of about $40,000.
In addition they have established a solar cell and solar panel technology, where they would like to establish their solar systems in combination with large energy storage systems that they currently develop. Based on news reports they plan on moving rapidly in developing and expanding in the solar panel arena. This relationship with the city of Lancaster works well as solar is expanding in the valley and Mayor Parrish projects that Lancaster will produce more energy than it consumes with its solar expansion.

We will wait and see if BYD expands manufacturing in the Antelope Valley, but the prospect looks promising for real estate and land values if the projects develop here.

Tuesday, July 12, 2011

Land Banking with a California Land Contract

Land Banking is a term used by land investors. It essentially means to buy land and hold it for a period of time for a long term gain. It is the same as holding a stock or security for a long period of time. Simply buy land, hold and wait to see what future growth patterns do to its market value.
A land contract is a simple contract between a buyer and seller to purchase real property. It doesn’t even have to be land. It can also be known as an installment sale agreement. It is an agreement between a seller and buyer whereby the seller provides financing to sell the property for an agreed purchase price and the buyer repays the loan in monthly installments. It is much like a typical mortgage agreement, but there isn’t a financial institution involved and there are only two parties in this transaction. Under a land contract, the seller retains the legal title to the property, yet allowing the buyer to take possession of it other than legal ownership. As an example, if a buyer pays $9,000 for a parcel with 10% down payment of $900 and then finances $8200 at 7% interest approximately $228.02 in installment payments a month over 3 years. The seller is providing a short term loan to the buyer. The seller holds legal title to the land until the loan is paid in full. After the full purchase price has been paid including interest, the seller will convey title to the property to the buyer, and record the deed with the recorder's office. If the buyer defaults on their installment payments then typically the land contract would consider this a failure to pay, and the buyer would be in breach of contract. In a failure to pay any equity earned by the buyer would return to the seller. The seller would retain all of the buyer’s payments and interest.
Land contracts are different than the typical real estate contracts, because in a land contract the seller is providing a loan to the buyer (short term seller financing). In a standard real estate contract, if there is a loan then the loan is handled by the third party lender who administers the payments after escrow closes. If a third party lender is involved then a lien (mortgage) or trust deed would be recorded on the property.
This is an easy way for a buyer to limit their risk in buying land if they don’t have the full cash amount in order to buy a property. It is also more cost effective and offers security to the seller as they will not have to foreclose on the property. We are offering land contracts on our smaller parcels, so it allows land buyers to invest in real estate with less capital and risk for tomorrow’s reward. We also think banking on your future with real estate still remains one of the best means to secure your retirement, or long term needs. With today’s low bank interest rates investing in land is a far better alternative.


Friday, July 1, 2011

New Highway from Los Angeles County to San Bernardino County Would Increase Land Values on Antelope Valley’s East Side

There has been a proposal for a High Desert Corridor Highway (E 220) of approximately sixty three miles from Hwy 15 (SR-18) in San Bernardino to Palmdale Ca. (SR-14). This will greatly enhance access between the two major cities of Palmdale and Victorville, Ca. as the current thru road is Hwy 138 which is a two lane road. The High Desert Corridor Joint Power Authority (HDCJPA) is administering the project and it is currently in the environmental phase. The HDC will construct this new 60 mile east west expressway and likely a truck toll facility between Los Angeles and San Bernardino counties within the decade. The highway segment would be an eight lane freeway and it includes a High Occupancy Vehicle (HOV) lane in each direction from SR-14 past the Palmdale Airport to 50th St East along an alignment paralleling Ave P-8 in Palmdale, Ca. It may have to drop to Ave Q to pass Lake Los Angeles and reconnect to P-8 once near Palmdale. Most of the land along Ave P-8 is open space without any road access. It also looks like it will run north south along 50th street East up to Ave E and then run to Ave D (Hwy 138) west of Hwy 14. The exact details of the road route are not totally specific on the land targeted. It may still be under review while the environmental phase continues. In 2009, the Metro Board approved $500,000 for the HDCJPA to support the agency’s efforts. Measure R provided $33 million for environmental clearance. The City of Victorville received an $800,000 federal earmark which was transferred to the HDCJPA for the project. These funds will be used for the environmental clearance. The environmental clearance phase is scheduled to be completed by 2013 and construction completed by 2020. It looks like they will need additional funds for the construction phase.

An eight lane expressway will need to take a considerable amount of space along Ave P8 where land values are at there ten year lows. There are also opportunities along Ave E between Hwy 14 and 50th Street East. The project is not fully approved and technically it has not begun but buying land on the far-east side along this freeway route looks like a good long term investment in our opinion. As buying low priced land and holding it for long term investment is the essence of land banking. Even if the proposed route changes the land prices on Antelope Valley’s east side are currently very low. If you are interested in low price land opportunities then contact us for potential land banking acquisitions.

Friday, June 17, 2011

Senate Bill 676 Will Allow Kern County Farmers to Grow Industrial Hemp on their Land

>Industrial Hemp has made its way back on the agenda in Sacramento with SB 676 proposed by Mark Leno the San Francisco/Marin County State Senator. It is the California Industrial Hemp Farming Act of 2011. Similar bills were vetoed by previous Governor Schwartzenegger. The bill establishes a five county pilot project for growing Industrial Hemp. The Counties which will be allowed to grow hemp if this bill passes are Imperial, Kern, Kings, San Joaquin and Yolo Counties.

Industrial Hemp has a variety of uses from clothing, foods (breads, energy bars, etc.), health, beauty products, and paper products. Tens of thousands of products use hemp. The bill states that only these counties can grow industrial hemp with 5 acres minimum, and with no upper acreage limit. It must be for agricultural use or research. Farmers must test the hemp for THC content and destroy crops with an excessive THC count. Industrial Hemp looks like the narcotic marijuana plant, but it has very low levels of THC. Thus its used only for industrial purposes. There are other regulations in order to not disguise Hemp with the Marijuana version such as no clandestine or backyard growing will be allowed.

Federal Law enforced by the DEA (Drug Enforcement Administration) prohibited the growing and cultivation of Industrial Hemp, as the DEA regarded Industrial Hemp as a controlled substance like Marijuana. The DEA’s claim was recently over-ruled by the 9th Circuit Court of Appeals in 2004 as the court stipulated that the DEA has no authority over the 1970 Controlled Substance Act. Farmers were allowed to grow hemp but the extra security, fencing, and DEA regulation were cost prohibited.

Here are some positive facts regarding hemp versus tree paper. Hemp paper doesn’t require toxic bleaching chemicals. It can be whitened with hydrogen peroxide, which doesn’t poison waterways as chloride and bleach do with the chemicals used in making wood pulp paper. Hemp paper can be recycled 7 to 8 times, compared with only 3 times for wood pulp paper. An acre of hemp produces as much paper as four acres of trees annually. It requires little or no pesticides or herbicides and produces two to four times more fiber than an acre of timber. It grows rapidly and can be harvested every 90 days and it is an ideal rotational crop. It also continues with the going green viewpoint of California as many trees will be saved. This “new” product will create jobs for Antelope Valley.

This may be a great opportunity for Kern County land owners as this would be a beginning of a need for available land. If this project succeeds then Antelope Valley may also be allowed to grow hemp as most of the available land in agricultural land, and it would be an ideal location. This “new” product will also create jobs for Antelope Valley.

Wednesday, June 1, 2011

Alas More Funds for The Cal High Speed Rail, But Will it Stop in Palmdale?

In 2008 voters approved nearly $10 billion in state bonds to fund the Cal High Speed Rail project under Proposition 1A and now this past month Transportation Secretary Ray LaHood took Florida’s $2 billion and gave it to 15 states and Amtrak. Florida’s new governor and legislator rejected their high speed rail, California gets a new $300 million which will be used to continue laying the groundwork for the nation’s first 220 mph high speed rail system in the state. The initial plan according to federal and Rail officials would be to run along the Central Valley as it would be the least expensive to begin. This is an essential part of the Obama Administrations proposed shovel ready projects. Thus the lion’s share of the $3.5 billion provided by the Obama administration must be spent on the rail line running between the tiny towns of Borden and Corcoran, Ca. Borden is outside of Merced and Corcoran is next to nowhere and is best known for its prison.
This can be chalked up to California’s continual poor planning as the CalHighSpeedRail Authority indicated earlier that there will be no ridership on the first phase. We believe they guarantee that with starting in sparsely populated Borden and Corcoran. Another issue that bogs the speedy trains is the disagreement with running the train from Bakersfield to Los Angeles via Lancaster and Palmdale Ca. Many including the LA Times writers want the direct route via Hwy 5 through the grapevine. They indicate it will save $1billion, and 30 miles. Yet, isn’t the trains objective to carry passengers? Bypassing Palmdale would eliminate potentially 700 thousand potential riders in Palmdale, Lancaster and Victorville. If the train is not potentially a commuter train, then why build it in urban areas like San Diego, LA, and San Jose, or it is only a train to compete with SouthWest airlines?
The final southern route into LA County will be debated, but there looks to be plenty of new opportunities along Hwy 99 as the White House and Governor Brown administration will not stand in the way of this moving train. Will it be a sign of more government waste by Democratic administrations, or a future jewel of the West U.S. Most land along Hwy 99 is farmland as we have been saying all along the farmers are the best long term land bankers over time. Check out our land along the future potential route in Lancaster Ca. via www.vacantlanddeals.com so you can be a land banker too.

Sunday, May 15, 2011

How to Diversify Investments by Rolling Over or Transferring an IRA/401k into California Land Investment?

Most IRA’s and 401k are invested in stocks and bonds, but many are not aware that you can invest the money that you have in your IRA or 401K into land investment. This also includes investments such as other real estate, precious metals, and commodities.
You can simply do this by rolling your current IRA and/or 401K account into a new "Self Directed IRA" account at no major cost to you. You will also retain the tax deferred status without penalties as you have not cashed out your investment. The Self Directed IRA Company will do most of the work for you, but the stock brokerage may work to attempt to retain you as their customer.
Part of the reason a Self Directed IRA is more valuable is that it provides more control and choices. This control provides you the ability to invest in land, or precious metals like gold and silver which all are hedges against inflation. If you speak to a gold or silver investment company they typically suggest a five year hold in those precious metals. In addition, land investment companies also suggest a five year or longer hold. Longer term holds depends on the location of your land investment (distance from development), and your future retirement horizon goals.
There is a difference between and transfer and a rollover. When implementing a transfer your IRA assets are moved directly from one financial institution (typically a brokerage) to another without the IRA owner actually taking possession of the assets. An IRA transfer avoids any possible tax liabilities that could occur by taking possession of your IRA/401K funds, while a rollover occurs when an individual requests a distribution from an IRA or a Qualified Retirement Plan. Your investment firm would then roll the funds into the Self Directed IRA. According to IRA laws you are allowed only one roll-over in any 12 month period. Of the three types of rollovers a Qualified Retirement Plan Direct rollover is not treated under this 12 month rule, while the other two rollovers IRA roll over and a Qualified Retirement Plan rollover are.
An IRA Rollover occurs when an individual has personally taken the distribution of funds from their IRA. You then have 60 days to rollover the distribution into another IRA. If this is not completed in the 60 day period you would be subject to a 10% tax penalty.
The process begins by your establishment of a self directed IRA account. You then initiate the transfer with a transfer form provided by your current IRA holding custodial.
You then designate the new self directed IRA custodial and they receive your funds as the new custodial. You don’t have to transfer your entire IRA/401k but just as much as you need for the new investment.
Your new self directed IRA is now available to receive California land investment. VacantLandDeals specializes in low priced and low capital land investment opportunities. They have land near development typically with ideal zoning in the path of growth for future urban development providing your exit strategy in five to fifteen years. VacantLandDeals also specializes in investment capital under $50k and some investments fewer than twenty thousand, so the low capital and low risk investment has the opportunity to mature. Go to http://www.vacantlanddeals.com/lands-for-sale/ to review an investment opportunity.

Monday, May 2, 2011

Beautiful Earth Group Breaks Ground in the City of Lancaster Ca. as Another Alternative Energy Company Turns Rural Land into Developed Land

The City of Lancaster, Ca. continues to move alternative energy projects forward in their quest to be the Green Capital of California and the nation. Recently The City Council gave initial approval for a new solar energy project proposed by a New York firm Beautiful Earth Group at 90th West at H on 180 acres of land on the west side of the city in Del Sur. The Del Sur Solar site looks to be from 80th West to 90th West along Ave H in an L shape form and the narrow portion of the L from 80th to 85th W down to H-8. The city has already approved the Tuusso High Desert Solar project that will generate 20 megawatts of power after completion next year at 100th West at H. The other two solar sites within the city limits are Sunlight Partners and E-solar which we have referred to before.
Beautiful Earth Group is a Brooklyn NY Non-profit firm focused on developing wind power and solar energy facilities for utility companies and government and commercial users. They indicated to the press that they targeted this location as it was on previously disturbed land “farmed land” so eliminating its environmental impact. They also use less water than the steam generating solar facilities. This project will compose of two 19 mega-watt facilities and will generate energy to power 10,000 homes. The city’s planning department last November approved changes to the general plan and zoning to allow this Beautiful Earth project to move forward. The site is also situated next to a large SoCal Edison Substation at 90th West at H. Press releases indicate that the company is still in the process of getting power purchasing agreements from Edison. But the city of Lancaster is creating opportunities and fast tracking permits in order to facilitate green energy technology within current city limits.
What does this mean for a land investor? Well it shows that large portions of city and county land have been bought for developers other than residential and typical commercial developers. Although there is a great deal of land available in the Antelope Valley these solar and wind turbine sites take up a good portion of available land. The real estate growth in Southern California is in Antelope Valley, as fewer homes are being built here and elsewhere, but alternative energy firms Beautiful Earth, E-solar, First Solar Inc., NRG Energy, and BYD are moving into the valley and maybe your parcel will be next.

Wednesday, April 13, 2011

Wind Turbines and Solar Projects Moving Forward West of Lancaster, Ca. in Los Angeles County areas of Neenach and Fairmont Butte

According to the Los Angeles Times recent article, Element Power of Portland Oregon is planning to erect a 230-megawatt green energy facility with solar and wind generation abilities. The planned installation is very prettily and non-threateningly named “Wildflower” and is set for 2,200 private acres of former grazing land where the current property owner operates a horse ranch. Healy Ranch runs west of Fairmount Butte south of Ave E along 160th Street West. Most of the ranch is south of Ave F between 160 to 170th street West to the aqueduct at approximately Ave H. It also runs south of Ave G to 130th west in a u shaped form.
The company will have to tread carefully wind energy and solar power projects proposed in California often attract opposition from residents worried about encroachment, or animal rights groups concerns with endangered species and others with a host of complaints. A number of solar projects have been given the green light such as AVSolarRanchOne a close neighbor, Tuusso Energy at 100th West at H, and E-solar, Sunlight Partners closer to down in Lancaster. Wind projects are abundant in Kern County primarily in Tehachapi. Previously a wind project was proposed by Scottish Power near Fairmount Butte but that was rejected. Element Power US LLC has an uphill climb on its wind proposal, but Solar projects have been successful in the valley.
Element has filed an application for the project with the Los Angeles County Department of Regional Planning. The company is gearing up for environmental studies and research on how much local property tax revenue will be linked to the proposed facility.
The wind and solar farm, to be located on Antelope Valley’s west side and it is expected to create more than 300 jobs during construction in an area currently suffering a 17% unemployment rate. The site will produce enough power for more than 70,000 California homes, which will be sold to a utility through a power purchase agreement.

NRG Solar Gets Green Light and Wins Community Backing

Patric Hedlund of the Mountain Enterprise reported, In a surprising move, the Fairmont Town Council voted March 24 to withdraw their appeal to the Los Angeles County Regional Planning Commission against a solar farm given a “fast track” permit. NRG Solar was given a green light to begin building its facility in the Western Antelope Valley without first providing an Environmental Impact Report, which competing renewable energy developers have agreed to perform. The council filed an appeal, then went into private settlement discussions with the company. The appeal was scheduled to be heard on March 30. At the March 24 public meeting held at WeeVill Market, Keith Latham of NRG read the terms of the agreement, which he said will not be public until construction begins in June.
Some of the points: About 40 acres of land for conservation purposes will be “dedicated in perpetuity” to the community. Fences are limited to a height of six feet and no razor wire will be used. Access for wildlife movement through the fenced solar farm will be established.
NRG agreed to plant indigenous trees around the property and “adjacent to the lower fence” to mitigate visual impact. Wildlife movement through the trees will be encouraged. Outside of that “there will be a maintained area, so people can walk and get from one side of the project to the other, without undue problems” in case there are “wall to wall” energy projects.
A parcel of land is allocated for community services. A “small amount of money” will be provided to the community annually for 20 years through a conservancy created by the town council, he said, to benefit the community.
Several of those at the meeting said they are in favor of renewable wind and solar energy, but a regional plan needs to be created— with community involvement— before it is too late.
Members of the Fairmont Town Council said they had talked with “about 80 percent” of the residents within their boundaries, and that there was consensus to accept the plan. Attorneys Pat Murphy and David Jefferies said they had been involved in structuring the deal.
Some at the meeting said that those protesting the vote do not live within the boundaries of the Fairmont Council. In turn, the legalities of a town council forming a conservancy and entering into an agreement with NRG were questioned by some Western Antelope Valley residents after the meeting.
Wendy Reed, executive director of the Antelope Valley Conservancy issued a cease and desist letter immediately, regarding the name chosen for the Fairmont Council’s conservancy. She said it was too similar to her group’s registered service mark. Jefferies is reported to have agreed to use another name. —Reported by Patric Hedund

Friday, April 1, 2011

Sunlight Partners Gets Initial Approval for Photovoltaic Solar Site at 40th Street East at K8

The Lancaster Planning Commission minutes from their recent meeting indicate that Sunlight Partners is requesting a conditional use permit for the construction and operation of a photovoltaic solar electric energy generating facility in the Rural Residential Zone. The proposed project consists of rows of PV panels on single axis trackers which would generate approximately 1.5 megawatts (MW) of electricity. The City of Lancaster has determined that the development and use of alternative energy is beneficial to the community, and this determination is evident in the decisions made by the City Council. The City Council has implemented several solar and wind energy programs thus far and they are working to install solar panels on City facilities. Additionally, the City’s General Plan has several policies pertaining to alternative energy. These objectives address the need to develop new sources of energy, as well as reduce energy consumption, and it is consistent with the City’s goals according to the Commission.

The project site is currently vacant and zoned SRR (Semi Rural Residential). However, the City’s zoning code does not permit the development of commercial-style solar energy facilities under the current SRR zoning; therefore, rezoning of the site to RR-2.5(rural residential) is necessary to allow the project to move forward. The proposed project would operate year-round, producing a total of 1.5 MW of renewable electric power during daytime hours. Power generated by the proposed project would be sold to Southern California Edison. The proposed project consists of rows of photovoltaic panels on single axis trackers with three inverters in the middle of the project site. These photovoltaic panels would convert sunlight directly into electrical energy without the use of heat transfer fluid or cooling water. The project would tie into the transmission lines that run along 40th Street East. A chain-link fence would surround the project site and a 10-foot landscaped planter would be provided between the fence and property line to screen the development from the surrounding uses. Access to the project site would be provided via a gate on 40th Street East. Irrevocable offers of dedication would be provided for both Avenue K-8 and 37th Street East. Avenue K-8 would be dedicated at 42 feet from the centerline, and 37th Street East would be dedicated at 32 feet from the centerline.
The proposed project has the potential to impact views from the surrounding roads and nearby residences. The photovoltaic panels are low profile with a maximum height of approximately eight (8) feet. While the views of the project site would change, the development would not impede long range views. Additionally, the project site would be fenced and landscaped around the entire perimeter.
Construction of the proposed project would generate noise, which has the potential to impact surrounding land uses. Mitigation measures are required which would reduce noise impacts to a less than significant level. Minimal amounts of noise would be generated by the operation of the proposed project and only during routine maintenance as the panels and tracking system are silent. Most of the time the facility would be remotely operated and no noise would be generated. Additional environmental impacts could be generated during construction of the proposed project with respect to biological resources and geology soils. The construction of the proposed project has the potential to impact burrowing owls during vegetation removal and grading operations. The applicant is required to conduct a pre-construction burrowing owl survey prior to the issuance of any permits. In the event burrowing owls are encountered on the project site during the survey, the applicant shall coordinate with the California Department of Fish and Game to determine the appropriate procedures/mitigation. Therefore, potential impacts would be less than significant. The applicant is also required to prepare and implement a dust control plan in accordance with AVAQMD Rule 403 which would ensure that impacts from dust during construction are minimal. Therefore, staff is recommending that the Commission approve the zone change and conditional use permit subject to the proposed conditions, based on the site having sufficient area to accommodate the proposed development, adequate access and services being available for the use, and the lack of significant adverse effects on the surrounding area.

Wednesday, March 16, 2011

SoCal Edison Power line Project in Western Antelope Valley the Electromagnetic fields (EMF) Your Health and Property Value

Southern California Edison (SCE) is undergoing a project to install new High Tension power-lines through Antelope Valley and expand existing power lines. The new power-lines will run through Angeles National Forest and run up along 105th Street West to and through the western portions of Kern County. SCE would be required to obtain new easements across over 100 privately owned parcels, as they expand their existing lines and create this new path. The mere mention of a proposed high voltage transmission lines and a new utility corridor in a community causes concern to property values. Eminent domain procedures have been occurring where in some cases 2.5 acre parcels are cut in half to expand current power line paths leaving property owners with tiny remnants of their parcel sitting along the high tension lines. The project will have a direct affect by potentially reducing property values within their visual range. The loss of the panoramic scenic vistas most properties enjoy could decrease the value of their homes, parcels and ranches. Most would agree that power must be supplied from somewhere, but nobody wants a negative effect on their investments, asset or lives. Virtually 90% of western Antelope Valley and Kern County is vacant unused land with small pockets of custom homes and some farming. SCE is proposing to install these power-lines on uninhabited land(investment land), but the long term investor could be affected, or will they?

The issue with power-lines is that it will ruin the view, but mainly the effects of Electromagnetic Field (EMF) that it produces. EMF has many sources and includes overhead power lines, radio broadcast towers, telephone/television microwave transmission and computer equipment. EMF is invisible radio wave energy that in some circumstances can change biological function. EMF from SoCal Edison’s proposed power-lines is called "extremely low frequency" magnetic field, which are produced by high voltage power lines. Several studies have linked high voltage power lines with increased cancer risk for children. Research from the University of North Carolina in Chapel Hill and the University of Colorado found a five-fold increase in childhood cancer, particularly leukemia, in those homes near the highest level of extremely low frequency fields. Homes showing increased cancer risk were within 48 feet of power line wires designed to carry very high electric currents and within 22 feet of power lines designed to carry lower currents. Risks of breast cancer, depression, and other negative health effects are based on much more limited evidence and are even more speculative. There is enough information to have some concern, but not enough to set exposure standards they indicated. Other studies have indicated that the question of a "safe distance" is, at least, a complete unknown.
National Institute of Environmental Health Sciences (NIEHS) said that the "strongest evidence" for health effects comes from statistical associations observed in human populations with childhood leukemia and chronic lymphocytic leukemia in occupationally exposed adults such as electric utility workers, machinists and welders. "While the support from individual studies is weak," according to their report, "these epidemiological studies demonstrate, for some methods of measuring exposure, a fairly consistent pattern of a small, increased risk with increasing exposure that is somewhat weaker for chronic lymphocytic leukemia than for childhood leukemia."
However, laboratory studies and investigations of basic biological function do not support these epidemiological associations, according to the report. It says, "Virtually all of the laboratory evidence in animals and humans and most of the mechanistic studies in cells fail to support a causal [cause and effect] relationship."
While sections of the report say EMF exposure "cannot be recognized as entirely safe," the report concludes: "The NIEHS believes that the probability that EMF exposure is truly a health hazard is currently small. The weak epidemiological associations and lack of any laboratory support for these associations provide only marginal scientific support that exposure to this agent is causing any degree of harm."
Research continues on some "lingering concerns," the report says, and efforts to reduce exposures should continue.

It appears from the studies that the risk of power-line exposure is possible, but also maybe only a small hazard. The risk is enough for some land investors to not buy land near power-lines or sell at a reduced rate. We have observed numerous housing projects, strip malls, restaurants, and businesses operating along high tension power-lines. You can do your own visual research, and you will find medium sized high tension power-lines in and around densely populated areas. Development occurs in all facets around these power-lines, so in the long term when development is needed builders will buy and construct at and near power-lines. It may occur in the later stages of development, but when your parcel is surrounded by development then you can ask the highest value. Our conclusion is that property investment has its risks, but for longer term investors even power-line property can be profitable. But as there is an abundance of unencumbered land available in Los Angeles County then buying land today closer to development and services is a better investment today.

Tuesday, March 1, 2011

How to Get a Land Loan for a California Lot or Custom Home

Lot loans can be much more difficult to obtain than a typical home loan. Getting a mortgage loan for a home or condo may require a higher down payment and a good credit score in today’s loan market, but it is easy enough to obtain even with a thirty year payback. If you want a loan for raw land well today that is maybe mission impossible. There are no banks that we are aware of that will offer a 100% loan for raw land purchases. IndyMac Bank of Pasadena was one of the first banks to be taken over in the last financial crisis by the FDIC in 2008. Its assets were absorbed by OneWest Bank. We have found that IndyMac provided loans of up to 85% of the land value. A number of those properties were foreclosed on and resold in the past year. Other major banks like Bank of America and Wells Fargo have foreclosed on some land owners and have resold those properties in the last few years also. Yet we are not aware of the details of those foreclosures. A direct loan from a bank for a land parcel is likely a thing of the past as banks require more security and undeveloped land provides no bank security as raw land is more speculative and has no improvements.

A more likely land loan would be a loan to build a home. The most efficient way to do this would be a construct to perm loan which is a land loan to construct a home. It is different than a construction loan. According to ehow as construction loans are temporary as they are drawn upon during the construction process. There is no principal paid on a construction loan during this draw stage, as it is used entirely to construct a project. A construction perm loan is a one loan to build a home that takes the place of up to three separate loans. You can write a contract for the purchase of land, and add it to the loan package, saving the cost of closing a land loan. The second is the construction loan itself. One can go into a bank and get a construction loan and pay to close it. Later one would have to pay to close a permanent loan to pay off the construction loan. A construction perm loan would encompass all of these loans into one, saving money in time and closing costs. You get the loan to buy the land, and to construct the home making it a longer term loan.

Another option may be an “owner will carry loan” (OWC). This is a seller financed loan where the land seller gets interest from the buyer over time. These are typical monthly payments at normally competitive interest rates. These types of loans are usually short term from as low as three to fifteen years. They can be longer or even shorter terms. You should expect to pay current market interest, and we advice you get a no penalty for early payment. The down payment (deposit) is usually higher. An example may be a $20,000 property would require a $5000 deposit. The balance of $15,000 paid monthly at 7% interest over 5 years. In this case you would pay $297/month over 5 years or $17,820. This is an easier way to purchase land over time without the need for bank credit. If you fail to pay then the seller can foreclose on the note and the seller retains the deposit and any payments you have made. This process is very common in the purchase of raw land.
For more answers on land opportunities and owner will carry options contact us at vacantlanddeals.com

Wednesday, February 9, 2011

Where are the Significant Ecological Areas of the Antelope Valley in Los Angeles County, Ca?

We get a number of inquiries regarding the location of these plant and animal wild life areas. We have looked at specific areas of the Antelope Valley which harbor most of the Significant Ecological Areas (SEA) that encompasses stricter land uses. These areas are essentially protected natural locations and by definition a protected area would be a “clearly defined geographical space, recognized, dedicated and managed, through legal or other effective means to achieve long-term conservation of nature, the ecosystem, and cultural values”.
The stricter land use primarily means less development would be allowed, but development is not prohibited. For example a small portion of AVSolarRanchOne’s property is within a SEA Zone.
There is a map supplied by the Los Angeles County Regional Planning department, but as far as we can tell a detailed version is not online, but you can purchase one from the Planning Department. The SEA zone areas that involve the Antelope Valley are mostly on the far west side. Most of these but not all of theses area involve the Joshua Tree Woodlands. Approximately (2) 640 acres parcel areas between 180th West to 190th West Ave C-8 to Ave E-8, Also a large 640 acre Park at 200th West to 210th at Ave E to Ave F, Most of Fairmount Butte south of Ave D (Hwy 138) through the Butte mountains to the foothills of the San Gabriel Mountains. It also encompasses most of the area from 200th to 210th West from Ave. C-8 to Ave F which includes the Park. Another area is a backward L shaped area from 190th West to 200th West Ave B-8 to Ave D. In addition, there are two large areas which are irregularly shaped from Ave A to A-12 200th West to 220th West. This particular area was owned by Red Dawn SunTower LLC (E-Solar) which they now appear to be selling. It may be because they ran across environmental issues with the Joshua Tree Woodlands. There is another large area which spans the breadth and width of AV SolarRanchOne now owned by First Solar Inc.
This SEA Zone area is generally north of the developing Solar Ranch running 140th West to 180th West from Ave B to Ave D. The SEA zone doesn’t cover all of this area but most of it.
On Antelope Valley’s East Side there are three main Significant Ecological Areas one is the Llano wash where the SEA zone runs the length and width of this along a narrow stream corridor from Ave Z north to Ave M 110th East to 150th East at its widest span. The second area surrounds and encompasses Saddle Butte Park which is 160th East to 200th East Ave J to Ave M. This SEA zone is almost a circle around the Park. The third area is 230th Street East to 260th Street East (San Bernardino County line) from Ave R south to the mountains. Theses three East side areas involve water areas and washes which provide nutrients and protection to small plants and animal life.
There is sparse development in these SEA zones, but large development would most likely be prohibited. Two cases in point are the Fairmount Butte Motor Sports park was within a SEA zone and that project is now cancelled, and also E-Solar is selling most of the land it recently acquired we think primarily because of the Joshua Tree Woodlands. But custom homes have been built and continually are built in these areas, and as we mention part of AV Solar Ranch One’s property is within a SEA Zone.

Tuesday, February 1, 2011

Environmentalists Say Yes to Solar Land Development But No to MotorSports

Late last year the Fairmont Butte Motorsports Developer bowed to environmental and community opposition. In an open letter to supporters he wrote: I regret to inform you that, after more than eight years of hard work and high hopes, I have decided to discontinue efforts to create our vision for a beautiful new racetrack in the Antelope Valley. As you might imagine, it was an extremely difficult decision
Thomas E. Malloy

We also located a follow up e-mail from County Supervisor Deputy
via the AV High Desert Forum site
November 18, 2010
I have been informed this afternoon the property where the Fairmont Motor Sports park was proposed to go has been sold to another buyer. The buyer is using the property as mitigation land and open space. The Racetrack is no longer a concern as County Regional Planning has been told to stop all work on the project.

Norm Hickling, Deputy to Supervisor Antonovich
Antelope Valley Field Office

The AVSolar Ranch One had passed its EIR (Environmental Impact Report) last September, but the Motorsports proposal couldn’t jump that hurdle. AV Solar Ranch One indicates on their website that their projects have environmental benefits of low visual impact panels (10 feet maximum), no water requirement to produce electricity, avoidance of Joshua Tree Woodlands, and no impact on threaten species. Both projects were situated almost across the road from one another at 170th to 150th West at Hwy 138 (Ave D).

The Joshua Tree Woodlands is part if the Significant Ecological Area (SEA), and virtually fifty percent of the Motorsports Parkway proposal was in the SEA zone. It also appears a small portion of AV Solar is within the SEA zone. LA Regional Planning indicates that the 320 acres of land the Parkway was going to use will now be mitigation land and open space, so this area at 150th West at Hwy 138 will be not be developed. It also looks like much of the Fairmont Butte area will not be developable as much of this area is SEA zone with protected plants and animal life. Property owners should think seriously about buying land in these areas as environmental groups and Los Angeles Regional have drawn a line in the Antelope Valley desert sand. Large developments in SEA zones may face environmental obstacles, but small custom homes on SEA zones have occurred as they have limited impact on the environment.

Tuesday, January 18, 2011

Tips on Buying California Investment Property, Undeveloped or Pre-Developed Land?

Generally there is only developed land which has some or full development on the parcel, or undeveloped land which would be considered just raw land with limited or no access but with future potential development. Much of the available raw land in the US is agricultural land or just vacant unused land. There is also an in between designation we identify as pre-developed land. The main distinction between Un and Pre developed land is the proximity to current development and the zoning of the parcel, but both are Land Banking options. Undeveloped and Pre-developed land offers the potential of both risk and reward whether it is zoned rural residential agricultural land, or typically better zoned pre-developed land which could be zoned urban residential, industrial or even commercial land use. Undeveloped land is generally less expensive to purchase than pre or developed land. An abundance of undeveloped land in Los Angeles County is designated agricultural use as large amounts of land is needed for farming, but usually this land type also allows limited rural residential uses. Don’t be afraid of the agricultural zoning as much of current developed land was previously agricultural land. Many of today’s farmers are now real estate investors as urban growth has encroached and absorbed their land.

Many parts of the City of Palmdale and Lancaster Ca. include vacant land parcels within the city limits or just outside, but at a distance from development. Much of this pre-developed land is rural residential, industrial (light or heavy) and a lot of multi-family residential zoning. The lowest price per acre would be the rural residential where an owner would be allowed to build one home per 2.5 acres. This type of land is cheaper acreage but high reward as the zoning can change to a more favorable zoning over time as city planning designates. The higher price per acre available vacant parcels would be multi-residential R-7000 or R-10,000 allowing one dwelling per 7000 or 10,000 square feet. You would have to pay a much higher price for this type of parcel zoning, but the return on investment can be in the thousands of percentages since housing developers will pay top dollar for needed property if you held the parcel longer term.

You can look at buying either undeveloped or pre-develop land based on your capital and time horizon. A low capital investment and longer time horizon which may be typical for a 401k, or IRA type of investment would best fit an undeveloped parcel. For example an investor could purchased a 10 acre parcel in LA County for $3000/acre of rural residential and agricultural land zoned and hold it for fifteen to twenty years. It is an ideal buy and hold opportunity where you should target a 200% return in twenty years or less. This would be a buy it and don’t worry about it investment. Undeveloped land should have the higher percentage increase of the three examples of land over time as it is easier to double you money on a $3000/acre investment than a $50,000 per acre investment.

Now with pre-developed land we have a high profit potential and a lower risk property with usually a higher capital investment and shorter time horizon target. Potentially it has all of the profit potential built in. Ideally, pre-developed land could have a better return on investment based on its zoning. Pre-developed land would be land directly in the path of growth with targeted zoning and in or near current city limits. A past example of pre-developed land would be the San Fernando Valley where decades ago one would pay $10,000 per acre for a vacant land parcel just outside current development. Today that type of parcel would be hundreds of thousands of dollars per acre over several decades. But you don’t have to sell the parcel after holding for decades as the parcel should be profitable in less than ten years. We look at pre-developed land as a more favorable profit potential in a shorter time frame as it is the land that has been allocated for near term future development for the cities growth. The urban development alone will drive the price increase of this type of property.

We have both types of properties in our inventory, which fit undeveloped and pre-develop scenarios in Northern Los Angeles County cities of Palmdale and Lancaster Ca.

Thursday, January 6, 2011

Why Los Angeles County Undeveloped Land is a Better Investment Vehicle Than the Stock Market

The Stock Market in 2010 has been rising, but the best long term secure investment may not be stocks in 2011. We feel land in general is a better long term investment than stocks. Stocks can be volatile and some stocks rise while others may go sideways or down. Most need an advisor to guide them in today’s equity markets, and with the global debt crisis their future value can be murky. Many analysts say the buy and hold strategy may be dead as short term trading is prominent in today’s stock markets. Land Banking and long and short term land investment has shown to be a more secure, patient, low risk and lucrative means for buy and hold investors. Investors can buy and forget about their investment for three to ten years as it grows. We focus on Los Angeles County land and undeveloped land in the Antelope Valley for several reasons. Mainly, the population growth in the county has increased from 4.1 million in 1950 to 9.6 million as of 1998. The US Census has projected that the population will increase to 12 million by 2025. The real estate prices have increased with this growth over the decades, but have recently returned to earth. In addition, land prices have also deflated with the real estate bubble. But real estate prices and land prices have potentially hit the bottom of the trough in the price curve. It is similar to buying stocks after a major sell off, since higher prices are most likely in the future. Land is at or near its bottom in this area as growth in the solar and wind industries has increased in the Antelope Valley recently. Solar and Wind Energy companies require large swaths of land for their facilities leaving less undeveloped land for homes. Home development is not on the increase currently, but once the population demands housing again then land prices will increase accordingly. Buying land now, especially pre-developed land at these lower prices has the potential to produce a much better return and lower risk investment then the stock market has in the past decade.

The past ten years the stock market has been referred to as the lost decade, since the market is trading right where it was nine years ago. Stocks, long touted as the best investment for the long term, have been one of the worst investments over the past nine years, and trounced even by lowly treasury bonds according to the WSJ(Aug. 2010). In an article from LandThink.com, Professor Jeremy Siegel of the University of Pennsylvania’s Wharton School indicated that stocks showed an average gain of seven percent a year when the data are controlled for inflation. This average works when looking at many stocks over many years. Some individual stocks may have increased more, but adjusted for inflation, a dollar invested in the S&P 500 in April 1999 produced no gain at the end of March 2008. The performance of big U.S. stocks amounts to an average annual rise of 1.3 percent during the past decade after dividends and inflation are counted in. (E.S. Browning, “Stocks Tarnished By ‘Lost Decade,’” Wall Street Journal, March 26, 2008.)

Yet, farm value in current dollars averaged $2,160 per acre nationwide on January 1, 2007, up from $974 in 1998, a 13.5 percent average annual gain according to the U.S. Department of Agriculture. Cropland during that period rose from $1,340 to $2,700; pasture rose from $489 to $1,160 (source Landthink.com)

An individual investor has to continually watch the stock market to ensure gains, or trust a financial planner to provide advice and expertise on the best stock investment. But undeveloped land is a much easier investment as it doesn’t require a financial advisor, maintenance, or exhaustive company research. Land is not exposed to flash crashes, insider trading, corporate public relation issues, or even Wikileaks. Land values slowly increase or decrease over time, so it is an ideal long term investment to literally bank on the future. It is the ideal buy and wait investment, so buying now at lower current prices may be your best retirement vehicle. Individuals simply can not make enough to retire by placing money in savings, or CD’s. You need to invest for your retirement, and we believe longer term land investment can provide you a secure future.

VacantLandDeals.com was formed to help investors find land investment opportunities at the low end of the market, and in the path of growth