Investment Opportunity: Buying Empty Lots

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REaltors, experts, everyone, feel free to give your 2cents.

My parents have some restaurant buddies who live in Airdrie who bought 8 empty lots North of Airdrie, I'm not sure of the exact location. They held onto the empty lots for about 3 years, each lot cost about $12k. Now that development has expanded to the area, they just sold each lot for roughly $100k profit, that's $800k. LOL. In the 3 years, the only expenses they incurred were just $50 in property taxes/unit/year. This is all the information my parents got from their buddies since it was their eldest daughter that handled everything.

Now this really stirred up my curiosity of the whole process. In the Chinese Newspapers, there is a company called S&D Canada that is offering a buying opportunity in Leduc. The location of the lots are by the Edmonton Airport, apparently there is a golf course nearby? The development is expected to reach there in a few years and investment returns are expected to be around 40% or more. The cost of each lot is around $20k and the land is yours. I don't have any of the dimension information.

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I've talked to them and the salespitch is enticing. Of course they'll tell you things like, the potential is enormous, you won't lose your initial investment, it's safe blah blah blah.

[benyl]

it is called land banking.

There usually isn't a downside. The risk is the time it takes to get developed.

Bridalwood was a prime example. Took 14 years for the investors to get their money out. They got 9% over the 14 years.

There is risk, albeit lower and thus lower returns.

[Weapon_R]

There is a company called Edgeworth Properties that is doing something like this. I'd be skeptical of any company that can't offer you some sort of guarantee on your investment, especially if they aren't well established.

[max_boost]

There are definitely no guarantees. You basically buy land and let it sit there. The land is yours, it is in your name. If the development never gets there, then you'll just never see major gains.

Now everything does make sense in a way. But it seems like potentially a really long term investment. Who knows how fast things can develop especially with all this talk about a housing meltdown.

[asuth077]

Watch out for building obligations, some areas and developments have requirements that you build on your lot within so many years. Not sure if it applys, just a warning.

[Oz-]

Genesis started out by doing that.

Gobi and Arthur Wong made a fortune by using other people's money and not committing anything.

Personally, I would be skeptical about it. You can find the land yourself and hold on to it until a developer wants to get it off you (just have to predict where).

Some places have serious varying cost for land

Stampede paid ~6 mill/acre for Vic Park expansion
<developer_01> bought some land that was ~750k/acre (ready to be developed)
<developer_02> bought differant land that was about ~85k/acre (not ready for development for quite some time)

If you can find the capital you can make money on this, but I would say do it yourself or find someone else to invest with and not something like that.

Edit: I am assuming you are talking about land lots that are acres rather then something like a 40 ft x 100 ft lot.

[Mar]

You also have the opportunity cose of what you could have made in a 3 year bond with $36,000 so it cost a lot more than $50.

[max_boost]

Originally posted by Oz-
Genesis started out by doing that.

Gobi and Arthur Wong made a fortune by using other people's money and not committing anything.

Personally, I would be skeptical about it. You can find the land yourself and hold on to it until a developer wants to get it off you (just have to predict where).

Some places have serious varying cost for land

Stampede paid ~6 mill/acre for Vic Park expansion
&lt;developer_01&gt; bought some land that was ~750k/acre (ready to be developed)
&lt;developer_02&gt; bought differant land that was about ~85k/acre (not ready for development for quite some time)

If you can find the capital you can make money on this, but I would say do it yourself or find someone else to invest with and not something like that.

Edit: I am assuming you are talking about land lots that are acres rather then something like a 40 ft x 100 ft lot.

^^^
Thanks for the info. I'm referring to individual lots however. Don't have that type of capital to throw around. The attractiveness of the individual lots were, low upfront capital, land title security, low risk, and potentially above average returns.

A representative from S&D will be visiting this weekend, I'll get more details

[benyl]

Just remember that you can't mortgage land.

[Weapon_R]

Why not use the 20k to invest in more real estate? No matter what you buy, its the safest and currently the best investment to get into.

Try looking into Edmonton properties.

[Schwa]

My mom works for S&D and I can tell you that the stuff outside Edmonton is legit. The land is sold in 1/4 acre units so I believe the full acre would be 80000 if one unit is 20000.

If you are interested you can PM me and I can get you more information or even get her to show you what its all about.

[Khalil.e]

www.waltoninternational.com

[Weapon_R]

Originally posted by Khalil.e
www.waltoninternational.com

Another company full of empty promises and inflated returns. My brother in law foolishly invested in this company 5 years ago, and their "project" hasn't paid out yet.

[Oz-]

Originally posted by Weapon_R


Another company full of empty promises and inflated returns. My brother in law foolishly invested in this company 5 years ago, and their &quot;project&quot; hasn't paid out yet.

A big thing with Real Estate is that it is traditionally not a very liquid assest (which I am sure you know) and people expect quick payouts. Sure it can happen but owning land, is for the long haul.

[Weapon_R]

Originally posted by Oz-


A big thing with Real Estate is that it is traditionally not a very liquid assest (which I am sure you know) and people expect quick payouts. Sure it can happen but owning land, is for the long haul.

Won't disagree with you there, but Walton has broken several dozen promises so far. Every 3 months the reps promise a payout on a certain day and it just doesn't happen. Just a headsup.

[max_boost]

Originally posted by Schwa
My mom works for S&amp;D and I can tell you that the stuff outside Edmonton is legit. The land is sold in 1/4 acre units so I believe the full acre would be 80000 if one unit is 20000.

If you are interested you can PM me and I can get you more information or even get her to show you what its all about.

http://www.sdintlgroup.com/

Thanks.

Had a very informative meeting with a representative the other day. The folks jumped in with a 1/2 acre purchase, like you said, seems very legit. We'll see what happens in a few years hehe

[D. Dub]

Originally posted by benyl
Just remember that you can't mortgage land.

Sure you can...you can mortgage any kinda dirt if it has value.

[D. Dub]

Originally posted by Weapon_R


Another company full of empty promises and inflated returns. My brother in law foolishly invested in this company 5 years ago, and their &quot;project&quot; hasn't paid out yet.

Thats why its called land speculation!!!! It isn't an exact science.

[sputnik]

Originally posted by Weapon_R
Won't disagree with you there, but Walton has broken several dozen promises so far. Every 3 months the reps promise a payout on a certain day and it just doesn't happen. Just a headsup.

Sounds more like a High Yield Investment Program (HYIP) scam. Most real estate investment programs dont have regular payouts.

What kind of promises did they make?

http://www.quatloos.com/hyip.php
http://en.wikipedia.org/wiki/HYIP
http://forums.beyond.ca/showthread.p...hreadid=134536