Commercial Real Estate Investment/Purchasing Bare Land

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Expert: - 9/26/2008


Question
Hello Jim,

I am interested in learning if one can make money in real estate by just buying land in different areas, maybe internationally even, in anticipation that the land might give good future increases in value. For example, a potential for industrial, residential, commercial, mining, minerals development or other types of development.

I'm just not into fixing up houses, renting, leasing office space, etc. Just buying land and hopefully reselling at a later profit.

Would you know of any books, CDs, courses, or other trade publications or materials where one could gain the knowledge of how to purchase land for future resale profits intelligently?

Thank you very much.

Sincerely,

Mike E.

Answer
Mike-

Your idea would be a fascinating adventure if you have the funds to endure a few purchases that don't turn out the way you anticipate.  I am not the person to ask about land speculation because I have never been seriously involved in that specialty.   I do think about what you plan to do from time to time, however I am risk averse and conservative.

For ten years I was the exclusive agent for a top national retail firm that developed major centers that all contained my clients own big box.   I found identifying appropriate developable ground was extremely exciting and kept me very active.   However, all my sites were for immediate development - there was no holding period for the land as it sounds like there will be with your properties.

I am certain there are professional groups for land speculators that would likely direct you to periodicals and books on the subject.   I have read many commercial appraisal educational books that include detailed valuations of a very wide variety of commercial property.    Actual land appraisals in your region would also provide excellent insight into the endless considerations to evaluate when you approach a property you may consider for purchase.    The Publisher "Wiley Press" has excellent quality books on most specialized areas in the commercial real estate industry.

In the end, going on-line should open up a wide variety of sources for you to pursue to gain information on land speculation.

Good luck.  It will be interesting, but be extremely cautious about the validity of the materials / facts you are provided when you investigate prospective sites.

-Jim

Commercial Real Estate Investment

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Jim Avancena, CPM

Expertise

Best qualified to answer questions that involve commercial leases, that is, basic issues as well as the often unexpected effects of the complexities and inter-relationships of the provisions a lease may contain, explain how seemingly innocuous text in your lease can have a major impact on a Tenant or Landlord and their business operations, and the common practices utilized in the industry. I can untangle most matters that may come up from the time a tenant begins searching for a office or store space and the lease acquisition process, concerns related to remodeling/improving the leased premises, moving-in, subletting or assigning the leased space, and a long list of problems that may come up during the lease term and even after a tenant moves out. I have practical experience with most property management issues and resolving landlord and tenant disputes - especially those involving what may appear to be overcharges assessed for additional lease charges like CAM costs, operating expense reimbursement, real estate taxes, utilities, construction improvements etc. Note that I am not an attorney and cannot provide legal advice.

Experience

Thirty years active experience in the commercial real estate industry as a licensed real estate broker in the Washington DC Metro area (DC, Northern Virginia & Maryland). I have been admitted (approved) by the Maryland and DC courts to testify as an expert witness on the subjects of Commercial Leasing and Property Management in the area of standard industry practices. I have had a business for the last 14 years advising virtually every form of business entity from large national corporations to the smallest ma & pa new businesses regarding a wide range of commercial real estate matters in addition to property management and commercial leasing.

Organizations
Currently my three children keep me so busy that it is difficult to participate in organizations with continuing and specific time requirements.

Publications
I publish a local commercial real estate newsletter titled: "Tenants First". My firm was the subject of a high profile Washington Post business section cover page (2.25 full pages) feature story on January 13, 1993; titled "Overcharging Overhead".

Education/Credentials
BA in Political Science from Memphis University, and five years of study in the real estate development summer program at MIT. I was certified as a commercial property manager (CPM-IREM), and currently hold a brokers license in Maryland and the District of Columbia.

Awards and Honors
The same plaques and honors that most others in my industry have earned. I have none that I consider especially meaningful.

Past/Present Clients
Past clients include: The World Bank, George Washington University, National Association of Criminal Defense Attorneys, US Department of Commerce, The American Benefits Council, K-Mart Development, many law firms, a national union, other major organizations, and many, many small business firms and retail operators that I am most honored to serve. I estimate more than 1,500 firms/organizations.

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