Posted by cary on April 21, 2005 at 12:12:30:
Could it be they are charging more because it is in a gated community with pools, tennis courts, clubhouse, lakes, etc. as opposed to just a dry .25 acrea lot without all this? Just wondering because I noticed in Hot Springs you can get the same size land outside of that village being offered for $14,900 for $3,000 or so.
Florida Land - Good or Bad??? - Posted by Adam-NY
Posted by Adam-NY on January 10, 2005 at 01:19:47:
I have a friend that has the chance to invest in some land in florida for 17.5K. One year ago it was 5k and she passed on it. So far she knows that houses are now being built around the land and that a hwy may(dont know for sure) or is being built close by. I want to help her decide if it will be good to invest in the land now but what factors should I look at when analyzing the land. The deal is on the table now and we have a few days to ask questions before the land is put up for someone else.
Any and all information I should find out please post hear. Thanks for your help.
Adam
Re: Florida Land - Good or Bad??? - Posted by rehabber
Posted by rehabber on January 10, 2005 at 11:21:13:
I could be wrong…but…17k now, 5k a year ago…
a new highway coming in…sounds like Citrus Springs, FL
How did I guess? My family and I own 8 lots there.
We didn’t buy at the rock bottom 5k price, but at 8k,
they go for 16-17k now. I think it will still go
up, but at a more modest rate. Here’s why:
Land values on lots are driven up by what I’ll clasify
as 2 forces:
Citrus Springs went up from 5k to 15-17k for lots in
1 year due mainly to speculative demand. Sure, there
is some building going on there now, but for every
developed site, you’ll easily see 10 unbuilt raw sites.
So the big price increase that’s taken place was from
investors buying and buying and raising the prices.
A situation where lot prices (or any prices) is
sustained mainly by speculation can NOT continue
forever. Either ‘true usage’ demand has to kick in
at some point, or the investor fed frenzy will collapse
on itself- take a look at the emu/ostrich scheme of the
1990’s - people were buying emu/ostrich eggs for
speculation- yet no true big demand existed for emu/
ostrich meat, so that scheme eventually collapsed.
Back to Citrus Springs - the big raise so far was
based on speculation. The rise flattend out around
Nov-Dec '04 when many investors hit their price/
profit point and wanted to sell to get their profit.
Many bought at 5k, the price in Nov hit around 15k -
people thought “I tripled my money- sell now” so a
pile (hundreds) of Citrus lots went for sale then and
this glut of lots stopped the big upsurge in prices.
That’s the bad news. The days of tripling your
money, in less than a year, are over for Citrus (IMHO).
The Good news is… I’m seeing more and more builders
going into Citrus and starting to build. This will
increase the ‘true usage’ demand and keep the bottom
from falling out. I get postcards every week for
offers to buy our lots at 15-17k. As more builders
move in, that will go even higher.
But…in my experience, speculative demand always
causes prices to increase faster (in the frenzy) than
true usage demand does. I do not think that these
lots will be worth 3x (15k x 3 = 45k) at the end of
2005. But…they will probably easily be worth 20k
and very likely 25k. If you buy at 15k and can sell
a year later for 25k- you just made a respectable
66% return for signing a piece of paper (the deed).
I once read that any return over 20% per year (20%
by the way folks, in historic terms, is a great %
return) is excellent on raw lots.
In summary - I don’t think the Citrus lots will get
a 3x return per year anymore, but you should be able
to make approx 30-50% return on these lots now.
PS- by the way…“why didn’t I sell our lots?” - I’m
holding on until the 20-25k mark, then I’ll sell,
happy to get 2 1/2 to 3x return on my initial
investment.
My 2 cents…hope this helps
Re: Florida Land - Good or Bad??? - Posted by rudy in ca
Posted by rudy in ca on January 10, 2005 at 10:17:03:
In Addition to location 3x and timing 3 x we should more importantly add due diligence 4 times. Comps,Zoning, title, utilities, sewer, power,set backs,city ordinance Etc. Check what’s available other than ones being offered to you specially if you are out of towner.
My 2 cents and i don’t mean to offend.
Location, loc, loc… timing, timing, etc… - Posted by JT-IN
Posted by JT-IN on January 10, 2005 at 07:56:01:
Adam:
Location and timing are everything… The answer depends all in “where” the property is located, and what your friends purpose of the investment, or “exit strategy” might be…?
Also, beware of information… yes information can be good, or it can confuse… Case in point is Clints post of the article… While the info might be great to have, understanding, digesting and placing that info in “real time” and “current market conditions” if what it is all about… One would imagine that from reading the article (the portion related to Lehigh, FL; which I have first hand knowldge about), that there was some scam purported upon a number of folks… The original purchasers timing was just way off… however, the 2nd buyer who paid 10.9K for the property from the land CA company, and ultimately defaulted, really screwed up… beacause they had something of value and did not relaize it… Although they undoubtedly overpaid for it at the time, that land is worth way more than that right now… The point of the article goes on to say that the unsuspecting stooge who paid 14.9K for it in Jan 04 really got hosed… The reality of the matter is that the very same lot today could be sold for between 25K to 28K… in 30 days. So who is the stooge here…?
So you must understand the market dynamics and make an informed decision… What has cauysed the land value to go from 5K to 17.5K in the past year…? Likely it is demand… demand for affordable housing. Where do you go to find a buildable lot, (assuming that the subject lot is buildable, and that would need to be part of the due diligence), in a very desirable climate…? So the question is… will the demand continue…? It looks like it to me, since folks in the midwest are fed up with winters… baby boomers are looking for that retirement spot… and there is a lot of cash out there chasing a finite amount of buildable land… which causes prices to rise…
Recently I have read much about he FL markets… and it is perceived by some “experts” that the costs of FL land and improvements are still considered “cheap” by comparison. As it relates to the “affordability index”; how much of ones paycheck or available resources can be spent on housing…? Based upon these assumptions, of the percentage that is spent elsewhere, the prices should continue to rise in FL. The perception is that it is still a decent deal… and prices keep rising… based upon demand… This will end somewhere, but personally I don’t think that we are close to that point… barring a spike in interest rates…
So do your homework, understand the factors that are causing the market to rise, and determine if those conditions will prevail for the foreseeable future… If they didn’t, does your friend have the ability and the fortitude to sit on the investment… ? Or is this next years bread money…?
Location, timing and market conditions are everything here…
Just the way that I view things…
JT-IN
Re: Florida Land - Good or Bad??? - Posted by Clint
Posted by Clint on January 10, 2005 at 05:47:17:
Please read this article, it was an AP Wire report about ccheap land int FL and CA
http://www.recordnet.com/articlelink/010205/business/articles/010205-b-2.php
Re: Florida Land - Good or Bad??? - Posted by Danny
Posted by Danny on January 28, 2005 at 13:29:56:
Hi, I live in CT and I’m just starting to look on the internet for information regarding buying land in Florida. I liked your educated reply to the former question. I was wondering if you have any recommedations on buying land - where and what to look for or look out for.
Thanks…can you reply to dc4444@hotmail.com
Re: Florida Land - Good or Bad??? - Posted by Adam - NY
Posted by Adam - NY on January 10, 2005 at 19:20:22:
You are correct. There is alot of info I am missing that I will find out in the next couple of days. I dont even know where the lots are located yet. I just wanted a little advice as to the market conditions down there. Thanks
Re: Location, loc, loc… timing, timing, etc… - Posted by Danny
Posted by Danny on January 28, 2005 at 13:35:55:
Sound like good advice…Do you know of a good place on the internet to get sound, unbiased advice on where to buy land in Florida and what pitfalls to look out for?
Thanks…if you could email dc4444@hotmail.com that would be good.
Re: Location, loc, loc… timing, timing, etc… - Posted by Ben (NJ)
Posted by Ben (NJ) on January 10, 2005 at 09:07:03:
I agree. For every horror story I have also heard of people who have assigned their contracts alone for a six-figure profit prior to even breaking ground.
Hot Spring, Arkansas - Caliente!!! - Posted by rehabber
Posted by rehabber on January 10, 2005 at 17:43:49:
Their next area that they (Natl Rec Properties -
w/ Eric Estrada as the spokesman) are doing is Hot
Springs, Arkansas.
They will fly you and your spouse/significant other out
there and then, when there, give you the bum’s rush to
sell you an overprices lot. Don’t knock them - it
works- they have sold out of all their overpriced lots in Palm Coast, FL, Lehigh Acres, FL, and Shastina, CA
What a concept- rinse, repeat in another area.
Proof that, in America, marketing is more important
than product (how else would a guy named
‘Ralph Lifshiztz’ be able to sell his clothing line,
with his name on it, for a premium price - hint - he
changed his name to be more exotic and ‘French’
sounding- you may know him by Ralph Lauren 
Smart
man - Who would wear a shirt with Ralph Lifshiztz
written on the pocket? It’s all about the MARKETING).
Anyways, I digressed. National Recreatinal Properties
is now selling 1/4 acre lots in Hot Springs, Arkansas
for the inflated price of $14,900. (see their link
at:
http://www.hotspringshomesites.com/affordablepricing/affordablepricing.shtml
Why do I say they are inflated at $14,900???
Because you can get the same 1/4 acre lots, in the same
area, for the low, low price of $2,500 on the open
market. see link at:
http://realtor.com/FindHome/HomeListings.asp?locallnk=yes&frm=bymap&mnbed=0&mnbath=0&mnprice=0&mxprice=99999999&js=off&pgnum=1&lnksrc=&fid=so&mnsqft=&mls=xmls&areaid=22969&typ=1%2C+2%2C+3%2C+4%2C+5%2C+6%2C+7&poe=realtor&ct=Hot+Springs+Village&st=AR&sbint=&vtsort=
Natl rec Properties targets uninformed far away, middle
America-type buyers to sell their inflated lots to.
But, it works, they already sold out their last 3
areas (Lehigh, Palm Coast, Shastina).
Proof that it’s all in the marketing.
Re: Florida Land - Good or Bad??? - Posted by rehabber
Posted by rehabber on January 10, 2005 at 10:59:07:
One way to make some money is to ‘piggy-back’ off
of NRPI’s sheme. Once you see them starting a new
commercial for their next area (they were running
new ads for an area in Arkansas recently) you buy
lots.
NOT from NRPI (at their inflated prices) but
from the fair-priced general market. Then, with
the swarm of advertising NRPI is doing, thousands
will be interested in the new area. You offer these
people a lot/site same as NRPI is doing, but at a
better price than the highly inflated NRPI price.
You make money- you’re happy, and, compared to the
NRPI price, the people who buy from you get a
good deal. And you just ‘piggy back’ off all the
new attention and new demand the area is getting, courtesy of the millions in advertising NRPI is doing.
Re: Florida Land - Good or Bad??? - Posted by Alex
Posted by Alex on January 29, 2005 at 14:24:13:
Hi. I am interested, where did you get from pice of land fom?
I found lots at www.skygroupfs.com, do you think is that high price in Citrus spring?
Thanks,
Alex.