Control Of Raw Land For Future Infill Investing
I am staring out of the window at the Calif. Real Estate Scene. The weather is normal. Good and Bad, Sunny followed by Rain. Tiny little earth tremors, snarled traffic and our new Governor will give diction lessons to all the native born. Yes another day in LaLa land
The requirement for Housing fashioned out of shipping containers continues unabated. After all we need housing that is: Earthquake Proof, Termite Proof, Bullet proof, Fire proof and must of course due to heavy flooding. Float!
Is all this symptomatic of a turning market or merely an indication of an increased lunge for the stars?
I have been wandering the area of Los Angeles County. Good areas, bad areas. Very Suburban and some impacted by commercial, multiple dwellings and junk yards.
My search is for raw land, encumbered with little other then weeds and an occasional Coke Bottle or Beer Can.
I would like single lots surrounded by tract houses. I will take the single house on two lots. Buy, then sell the house, keeping the lot which is vacant. I wish to build an inventory of lots.
Where possible I buy the lots if they are far enough below the present retail market. Of course I also try to make purchases with as little cash as possible.
For instance I may try and get the buyer to come back with long term financing and full subordination of their note to allow future construction financing. I may in many instances overpay for the lot in exchange for a note coming back at no interest, all monthly payments to apply on the increased principle balance.
I may bargain a 99 year lease monthly payments only no principal reduction and options to purchase scattered over the life of the lease. Name your type of paper and I am sure I will use it in these purchases of land. Trying to fullfill the requirements of those who are offering to sell and, looking forward to my requirements at time of future lease and or sale.
I need a great many lots and I have arranged with some investment companies to participate in this endeavor. After all it is a repeat as to what happened in England back in Elizebeths time. Only difference is I don't wear a crown or been admitted to holy orders.
I see no reason we cannot do the same here in these Semi United States.
The need for lots is caused by my desire to create Low Cost Housing without creating an ongoing slum. I think the answer is infill, building these Container houses in and among existing tract houses and suburban single family developments. This does prevent the creation of a slum or a "Projects".
Of course this is merely the beginning. I would like to utilize Los Angeles County with its mix of races, creeds and ethnicity, an area in which to learn and correct mistakes in judgement, application and construction. Then spread out to most of the cities of the United States.
To that end there is a need for lots and of course there is a profit to be obtained in buying lots cheaply and then holding them and leasing the lots long term as we erect upon them a container house.
Supose that all the scattered members of TCI each went out and bargained some owner of land into the dirt, price wise and payment wise. Made deals that called for no payments until completion of construction. That called for no interest on Seller take back mortgages merely principal payments scattered over 40 years to achieve an interesting yield. With periodic times set for purchase in full.
Would certainly allow all of the members of TCI to go out of the box as to how to buy and how to pay. Would give those among us who are below poverty level, a starting point on which to initiate the slow steady climb to solvency and all thru control of infill lots in their area of residency.
"Under all is the land, the basis of true wealth."
If this is of interest, I will post a list of the various methods used to buy raw land with no money, little money, lots of money. Subordinated Mortgages, Partial Subordinated Mortgages, Contracts of participatiion etc. etc.
I am sure as each of us walk around our areas we will see vacant lots. Given up on by their owners, been a fire and the house was burned down, or the builder of the tract just ran out of steam and stopped with some lots still vacant. Perfect for a Low Cost House so modern in design and execution that you would think Frank Gehry or da Mies were involved in its creation. Of course the thought of a profit for your efforts never crossed my mind. But it is there.
Most of the heavy increase in prices is in finished dwellings. The price of raw land does not seem to have kept step. So now may be the time to buy. I know I am and I ask how about all of you? Does the thought of a profit on a piece of land in whose purchase you have not used money but Negotiation inspire you to act? I hope so. Gather some of the stuff of nature. Mark well where you buy cause we are going to need an awful lot of lots. Every portfolio should have a few lots scattered amidst the High Rise apartment houses, Shopping Centers and Pied a Tiers.
Lucius
The planner in me applauds your effort to attempt to interupt the monotony of SFH suburbs & garden-style apartments with infill housing that is affordable and unique. This is my goal once I get enough experience and equity in my town. Good luck and let us know the results.
Lucius:
I would be very interested in hearing about different methods for buying raw land, especially with no or little money!
Thank you.
David
this, my friend, is the barrier between me and mucho philly land. i find it all over the place, i just don't understand the 99-year lease and some of other jargon you used. once i get comfy enough in it, i'll be all over it.
please do enlighten me (us) to the best way to approach a single owner as well as an RDA-type suit, so i can most effectively get this done.
I am also interested. How it works?
Hi thar all you Investors. I would start to Post tonight but it is late and I must be up early tomorrow at 0430 to look at a house that actualy tried to change zip codes. It is a hillside and the weather is a little freeky and the heavy flooding seems to have underminded a Cassion have a feeling that the originating contractor shorted it a bit on proper depth. They say they can see the bottom of it at about 5 feet. Yip.
Owner says she is never going inside again. I would like to buy it as soon as I see that cassion bottom.
I will return about 8PM and will come on line and list all the classic ways to trade paper for property and still be able to finance your future development of the property. I find it sneeky but Queen Eliz back in England started it and pretty well financed the crown from that point on. Also the church, they do the same thing. Big thing in England is looking for Free Hold Land. Cause most of the goodies are Church or Crown and that dear friends I am trying to put to use out here in LaLa land. So far 53 lots. I only need about 2,700 more. Oh well, fun to try. I am open to suggestions so as I post you correct and add to my original thinking. I want to learn.
Lucius
Yeah me too! I'm very interested in hearing this. thanks
I have posted one transaction in which the owner does not want to sell. Unless he can get top top market. I cannot do this as my need for infill lots is ongoing and I must husband capital. There are others.
One: Lot is owned by bank. Taken in forclosure with five others. Builder scamed the bank. Talked them into a full payment one time instead of a five payment plan. Then dumped the lots. The bank is in at $15,000
I offered $20,000 if bank will lease me property for 50 years with option to buy at $20,000. Described to bank the asset it would gain owning raw land that was producing income. Income $50 a month for 50 years this equals $30,000. Option to purchase for $20,000. Looks good on a balance sheet bankers view. They agree if they can make the construction/takeout loan of $56,000, 7.3% int payable $375 a mo for 30 years no prepay penalty. Builder, us agree. Our profit on construction and sale is $24,000. Plus new owner pays taxes of course and $100 a month on sandwich landlease to builder. After paying landlease the Builder has a monthly profit of $50 a month. At end of 30 years or sooner owner can buy out lease for $20,000.
(On todays) market owner could refinance after one year, combine all the loans into one loan of about $78,000 6.5% int 30 years pay $490.36 and own the land Fee Simple.
The variations can be played and arranged as you the Developer/Builder wish. Interesting situation on taxes. The secret of course is negotiation. Here you need your street smarts and that dear friends is not learned out of books and texts.
Good luck and strong Negotiations
Lucius
Doing some small math, you would have to have no more than 34k in one of your modulars. Is this the case?
Lucius,
I am still lost.........Please go over the conditions entailed in your sales contract to your new buyer.
Also, were can I find the creative ways in Land purchase you mentioned previously?
Mike
Lucius,
I am still lost.........Please go over the conditions entailed in your sales contract to your new buyer.
Also, were can I find the creative ways in Land purchase you mentioned previously?
Mike
Are you saying that you have secured 53 lots in L.A. for 99 land leases for around 30 dollars a month??
WheelerDealer,
Now at 73 lots under control suitable for construction. Damn man, I took a leaf out of your book. I am not proud of my transactions but I have limited capital and I need to do this as soon as possible. A few are on 99 and then it goes all the way down to 50. Almost all have options to buy. Some are tied to a present time value and some are based on a future to be arrived at value. I have sold all of them as to the benefit of gaining improvements on the lots. All have given subordination agreements to obtain construction and take out financing. Of course the future home owners will pay the tax bill so the income is pure. Some of them I have to reach into the construction funds and pay a payment to the Land Owner for the execution of the subordination. Most I do not.
On some I have quit claim deed from an undivided interest owner and a lease from the remaining person in title. Oh it goes on and on. I have invented so many variations on the theme of property control, I may have to write a book for the guidance of future title companies trying to write policy.
Come on you would have been proud of me. I acted like a Car Salesman. Hell man this is right out of your own experiences.
I shall continue this gathering of land and at the same time fight the good fight in the building department.
Cheers the Esotoric deed drawer. Lucius
The money to be made on land in my area is in buying a parcel then subdividing into 2 or more -- not in buying individual, isolated building lots or even parcels with houses where the house can be demo'd. The demand for turnkey lots has driven the price up of these to strictly "retail" levels, and the numbers just don't work.
Oh dear me, never demo a house, not even a barn. Please re read. No better still. Here, is the explanation.
You look for the house that has been built on two lots. The house sits on one lot and the other is the expanded side yard. Keeps junk cars on it, or grows a vegetable garden that just never works. Or the kids had a play house that is now abandoned. Whatever.
That is the target that you seek. They have little if any use for it and as such to sell it will cause no change in their living patterns. Now that is prime for erection of an advanced type of housing which may impact the area and cause the beginning of an additional increase in prices, yeah just what we need. But if it must occur at least you get to be on the good side. You own a house newly erected that sparks the big changes.
Some time ago there was a Queen of England who was called Elizabeth. Her father Henry had caused some really big changes all caused by the fact he did not like older bossy woman who prayed a lot, had a funny accent and whose idea of a good time was to go to church. So he got rid of her and to accomplish this fact he had to start a church and a few other rather advanced institutions. The concept of Tything being a little strange to most Englishmen, he had to dream up some other kind of income. Not only for the Church now called with great originality, The Church of England, but he needed a steady flow of income himself. Much as he would have liked he just did not think Tything was the answer so he came up with a goody. He decided never to sell land. He also decided that all lands now in the name of the old Catholic religion would now belong to this far out faith called The Church of England. Also they would not sell any land. The both of them would just lease it out for say 99 years.
Wow, now that was far out. The financial district of London was really prime and that is the first of the lease outs. No interest, just rent payable every year or whatever. Worked really well. They have been doing it ever since.
So lets borrow from them, after all they borrow from us. Look at all the Golden Arches they now have. They also are starting to get fat. Fish and Chips smothered in Vineger and wrapped up in an old newspaper, thats out. Now it is a big fatty hamburger with are you ready for this, Ketchup!. No more Bangers and Mash, now it is a salad with pieces of chicken deep fried in a batter. You eat it with your fingers and talk Valley talk.
So supose you find a nice person who has a lot for sale or just owns a lot. You would like to buy it to build on. You have no money. Is not the reason you are here at TCI? To correct a rather large fault. No money! How can you enjoy the fruits of the latter days of the Merchantile Society without money?
The man has a lot and he figures its value on todays so called market at $75,000. He paid $5,000 long ago and has at last paid off the mortgage. Does he know what his tax is going to be? Even if he does a 1031 exchange at some time, the taxes will have to be paid. What if you could show him how to put the land to good use with a most excellent profit and here comes the goody no large overpowering tax? Would he love you forever? Of course. So you suggest that he give it to you. He turns you down. Ok, you say, you know and I know that the land is not really worth $75,000 so, let me give you more money and no tax.
Very simple he leases it to you for 99 years. We'll take a smaller amount of time if you meet resistance. Just keep it over 60 years. At 99 years that is a total of: 1,188 payments
If you offer to generate $80,000 that is a payment of $67.34 a month. You now offer to develope the lot with a really modern far out structure that some progressive modernistic builder will erect that will be the talk of the neighborhood. Of course at lease ending or on any default that house will belong to him.
Probably worth about $275,000. Now that ought to appeal to his greed. Oh yes, just a few little items. He agrees to full subordination to a construction/permanent loan in the amount of $58,000 for 30 years with an interest rate not to exceed 7.5%. Oh how nice if that should default he makes a killing. Pays off the $58,000 and sells for $275,000. Happy days. Now if you are very clever you also insert another little clause which allows you on any 30 day notice to pay him off in full and assume title to the land.
Worked for Elizabeth, I mean do you really think that Sir Francis Drake laid that cape down for nothing? Have you seen her? Long nose, red hair and mean eyes. Besides she sucked her thumb!
Now how much did you really pay for this land? Of course you are going to do a sandwich lease and your payment should be about $100 a month.and you only leased for 50 years.
I know it is annoying that we cannot extend our life time out over a few 100 years. But look at it this way, no grandchild of yours will ever pay for their schooling. The ramifications go on and on. The Church of England and the Crown of England have been doing this since the 1600's very profitable. The Bank of England is built on Lease Hold Land. Well if it is good enough for them it sure is good enough for us their decendents
On the above example you have a monthly income on the lease of about $32.66. Plus of course the profit you made on the house. Also you stand by and see any burble in payment and you foreclose and pick up the house, just keep the master lease payments rolling.
As I have shown you this is nothing new. When Luther was sounding off in Augsberg and what is now Holland was starting the stockmarket, well England was setting an example of how to control yet still expand the economy. It all worked just fine. So lets follow the leader. I am and so should you!
Lucius (converter of containers into houses.)
The demo scenario takes place where the property consists of only 1 lot. Obviously, if the property could accommodate 2 parcels (existing house on 1and the other vacant), one wouldn't demo the existing house.
Correct if me I'm wrong, but your reply boils down to this: find a property owner who doesn't want to sell the lot and is willing to lease it to you (50 years, 99 years, whatever long-term lease), subordinate to a construction lender and expect to collect sale value of the new house on his lot if you default under construction loan or lease. And oh, by the way, the owner will also agree to let you buy him out on 30 days' notice and take title to the property.
Why would any owner agree to let you buy him out and take title? There's no incentive for him to do so. And where are you coming up with a monthly income of $32.66 for the land tenant?
Now, Lucius, if you would when you reply, please try to keep the word count under 5,000.
It would be interested to see where in the US they do make sense today? Can somebody add something from some other states/regions of the country?
It would be interested to see where in the US they do make sense today? Can somebody add something from some other states/regions of the country?
It would be interested to see where in the US they do make sense today? Can somebody add something from some other states/regions of the country?
Leasehold payment is $67.34. a month.
The leasehold payment of final buyer of the house is $100.00 a mo. the difference is :
$32.66. That sum goes to the builder who holds a sandwich lease. He also made a profit on the sale of the house approx. $24,000 as of this minute.
You try for maximum gain in your negotiation. Sometimes you get it sometimes not.
Your buy out is negotiated. Depends how good you are. Will take less. The incentive is at buyout he gets $80,000 for the lot. Assume the market drops it is then a good deal. Assume market continues it is a top of the market buy. It does require a skill in negotiation. But then so does Seduction the lack of which I believe is called Rape.
I do hope this makes it clear to you.
Respectfully Lucius
$80,000 lots don't exist here except perhaps when one buys a parcel fully-contingent and subdivides, bringing per lot cost down to wholesale levels. In my experience, construction lenders aren't going to get involved in a deal where the borrower doesn't own the land. When Mr. & Mrs. Jones are willing to pay top retail prices for individual building lots ($150-250K and more), lot owners have no incentive to do the type of deal you're talking about. Negotiation skills, thus, become irrelevant.
My Dear Ms. Chadwick,
I am sorry that there are no cheap lots in your area of expertise and experience. Perhaps a little farther out? There has to be cheaper land somewhere in your great state.
My experience is that if the lease term is long enough and attractive enough. Lenders will love to lend especialy when the final product is worth over 150% of the construction loan.
CityBank is present lender of choice. Requires only an average statement from the Builder and of course prior experience in constructing.
Negotiation skills are never irrelevant.
My Great Grandfather built one of the first skyscrapers in Chicago. The Fisher Building down in the Loop. His total cash invested was zero and a lot of Negotiation. He kept on bargaining until he had a 99 year lease. Then borrowed all the money from two banks and built. Roaring success. Most of the profit to the banks was not on the loan but in cashing in their options to the surrounding land which they accumulated prior to construction.Guess who set that up. Yep himself. Grosse, Crude, Uneducated, called himself "The Kingfisher"
But he did it.
Dear Nancy, I have read your writings, they are well researched and full of excellent material as are your comments on this site. I look forward to reading them. But there is another side other then Text Booking and explaining Listing Codes and Regulations.
It is that wonderful ability to go out and just make deals and include yourself in with minimum capital. My Great Grandfather had it, I aspire to emulate him and his greatness.
My structure will on occasion be non mainstream or orthodox. I am dedicated to furnishing Low Cost Housing at a profit and without governmental help. If it takes a lot of jabber and making a fool of myself as I attempt to control property, so be it.
I understand that to you such a thing is not possible. I admit my paper creations and contracts may fly in the face of conventional thinking and practice. Both of which you are truly a master. But I am trying.
Respectfuly Lucius
Do you prefer the more formal "My dear Mr. Foster"?
How soon you forget the many words you poured forth barely a month ago to me commenting that our respective geographic areas are vastly different owing to forces of Nature and whatever else. You said, in part:
"...I think you are applying some lovely rules which are applicable on one side of the country and you are now trying to apply them to the absolute unique, one of a kind, area of Southern California at a time when many strange and wonderous things are occuring."
....
"So hesitate, listen not to those who would apply other rules to a very specialized area, besides, some very interesting soil and fault patterns have been newly discovered in that area and there is the possibility that a dwelling just might change Zip Codes some dark and stormy night. I mean when a man keeps a rubber boat and a set of oars by his bedside and he is half a mile inland. I hesitate."
Now it is March and you are pouring forth at great length to me that the very same marked distinctions between our areas that you posted in February have just... well...disappeared...magically...in the middle of the night. Surely you must appreciate that this leaves one to wonder if your near ancestors were chameleons.
What you said to me in February apparently is not true or valid in March. (Does that mean that what you say now in March will likely not be true or valid in April?) Now in March you tell me that I am (oh dear) once again ill-advised to heed your words of wisdom from February.
There are many sides to real estate. There are many sides to people. You apparently want to be able to label me and put me in the nice, neat, tight little box that you've described.
Do not be so sure that I fit nicely into that little box.
Do not be so sure that it is I and not you who is a "conventional thinker."
Please do tell more. I am all about urban infill/ affordable/ prefabricated housing and am presently trying to understand how to do precisely that in my area (Brooklyn, NY). How to acquire the land is the trickiest part and where my learning curve needs to be the sharpest. Please explain in more detail some of your deals - I want to learn!
My Dear Nancy Chadwick,
I agree our areas are different. My problem is in pursuit of housing applicable to all places I try to see universitality (made it up) in applications. I think you are right, what might work here would not be applicable in another part of the world. Although I must tell you watching the actions of Trump and Snyder I wonder.
I would never attempt to "label" you. I have copies of items that you have written that are far from text booky. I enjoy your stuff when you cut loose, as you just have . The creative you comes through and to me thats the best.
The methods I am using, (by necessity) working with limited capital to obtain control of land for infill building I am not fond of. I wish I had the capital to make larger downpayments which are what should be done. But I can't. So far about 72 parcels as of this date. Maybe its the rain. Gets landowners very nervous out here as due to the fires the land in the hillside areas is a little slippery.
I have been offered capital to create this housing but the price is loss of control either the HUD route or the Venture Capitalists.
HUD has done a terrible job in low cost housing. Perpetuated even financed continuation of Absentee Landlords and the result are "Projects". The Venture boys would take the company over on the first IPO. I know that, they admit it.
Yes my ancestors were chameleons, I accept that, but it is in the effort not to be reptiilian that I concentrate.
Consider, could this have a dual application?
Lucius
.
Lucius, insofar as not labelling me, the plain meaning of the English language leads to no other conclusion. This is what you said:
"Dear Nancy, I have read your writings, they are well researched and full of excellent material as are your comments on this site. I look forward to reading them. But there is another side other then Text Booking and explaining Listing Codes and Regulations. "
....
"I admit my paper creations and contracts may fly in the face of conventional thinking and practice. Both of which you are truly a master. "
We do not have landslides here, chronic flooding, or fires that cause hundreds of acres and forests to be ravaged, leveled and blackened. We do not have earthquakes or tsunamis. We are more fortunate here and generally have been spared the damage and trauma your area typically experiences from natural and man-made forces. Perhaps therein lies the reason why that here land is viewed as a commodity with inherent, proven, substantial value.
I do not disagree that government-subsidized housing, low-income housing, whatever name you put on it has not been and is not effective, and it is destructive in horrible ripple-effects to people and communities. I wish you success in your efforts.
Wow, what a collision of vanity!
NancyChadwick felt like she is getting in a "text-book box" and she didn't like it. She probably think and believe she is a creative investor extrodinaire~ !
Mr. Lufos you better watch or our NanacyChadwick turned warrior might get (even more) mad and what you going to do then? (Just like Mrs. Stewart, my high school teacher.) Quote her on inconsistency? Well, it's so obvious, even I can do it:
Hey NancyChadwick, in this post of yours you sound like an Amazon warrior and yet just yesterday you been quoting Ghandi, the legendary peace maker:
"Anger and intolerance are the twin enemies of correct understanding"... maybe you didn't understand Mr. Lufos?
You made me warry about inconsistency while quoting Lufos and now I am a bit disappointed that in the same time you did more or less the same. Well, no one is perfect, even Ghandi but if you quote him, you better be consistent and follow upo what he sad or quoting can be missunderstod as... you kno what I mean.
DealerJo,
It is not clear to me from your comment if you read my previous 2 replies to Lufos. If you read them, you will see that I attempted (apparently without success) to point out to Lufos the reasons why his land -lease-container methodology would not work in my multi-county area. If you did not read my previous 2 replies to Lufos, I think it would be helpful if you read them.
If you read the very recent article by GFous on negotiating, you will see that the same point is being made: when property owners are coming from a position of strength, there is little one can gain from trying to negotiate with them. This was one of several points I had made in my previous 2 replies to Lufos.
Back in February, Lufos essentially felt that rules of thumb I was using (and have been using) in connection with land were not valid in his area for all the reasons he stated in his February post (excerpts of which I quoted in my 3rd reply to Lufos here) because he said his area and mine were very different land-wise. Now in March, Lufos appears to be saying that "his" method of land buying works everywhere, including my area, and doesn't seem to acknowledge that there are differences between his area and mine land-wise and market-wise.
As Lufos should admit, he doesn't really know me. We've never met, or spoken on the phone, or had any lengthy communication with each other one-on-one, and therefore, he is not in any position to "sum me up" one way or the other as a person or as a real estate professional. Likewise, I don't know Lufos. I would not presume to label someone I didn't know.
This was not the first time Lufos has done this with me, the first occurring several months ago (perhaps before you came to TCI).
I do not appreciate someone who really doesn't know me presuming to put a label on me and trying to make me fit into his "Lufos box".
There are many sides to real estate. There are many sides to people. I do not believe it is appropriate or positive to label people as belonging in this little box or that little box, this little group or that little group. Perhaps you wouldn't mind being labelled and put into a little box. I do mind, particularly when the person who's labelling me has not a clue as to who I really am as a person and as a professional.
Actual Cost is about $28,000 to $32,000 there are some variables to be considered as we have to do the first 30 or so with on site work which will in latter models be done in a semi mobile factory that will be contained in two 40 ft containers. We sell at $58,000. A Buyers Grant for $2,000 is the downpayment.Thanks Uncle Sam. The first trust deed loan made by a bank is in the amount of $58,000 it is a construction loan that converts upon completion and purchase into a 30 year 7.2% int loan. The Buyer assumes it. Of course it is co-signed by me. The loan is reduced by the $2,000 grant to the Buyer. The remaining loan is then $56,000. Payments are: $375 a mo. The Leasehold payment is $100 a month.Payable to Props Unlimited. Who then pay on the Master Lease and keep about $30 some odd a month for 50 years. New Buyer of course pays all Real Estate Taxes due twice a year.
Escrow is done in house under my Real Estate License. Title Ins. is also arranged in house and is much reduced due to promise of all future business no matter where. The slightly elevated present interest rate is due to considerations given in conversion of loan from Construction Status to Standard 30 year fixed. Yes there is a small earned commission by Lucius Foster on each loan. Amounts to about One Point and a Half. There are small pluses all through these transactions I intend Properties Unlimited to be a very profitable concern not only now but ongoing over the next 70 odd years. I want it to be properly funded to address the task of supervision of all properties. Ready to insert on any default and regain the property. Able to convert to Freehold Estate on any of the prior property sales. Able to add on to structure as the requirements of the Householders change. A second story, larger garages, home office. etc. etc.
Cheers Lucius
Lucius, forgive my ignorance in this matter, but you stated that "Escrow is done in house under my Real Estate License". For those of us who are interested in this WONDERFULLY CREATIVE AND INSIGHTFUL project, what do we do if we don't have a Real Estate License, can we set up escrow on this kind of deal thru an outside source, OR is it important to do the escrow yourself to maintain control in future years and years to come??? Sorry, I'm still trying to grasp this entire concept, I'm a newbie, but I got that "tingling" feeling, know what I mean?? Kathleen.
Hate to post another "me too" but sure I would be interesting in getting some more info on this. As with others little out of pocket would be best.
andyj
Absolutely! I am way impressed. A page out of my book? I am looking for the cliff notes for yours. At least send me an outline. Negociating at its best. How long before placement of houses and a sale commences?
Placement er semi assembly of houses commence as soon as I have permit. I am of course encountering the usual problems in the building department. This is new and any entrenched burocracy will be hostile. Even when the item is for the common good. We experienced this once before in 1960 when the 9 cassion (pilings) foundation was first presented. You would have thought we had tried to introduce Caediasim into the churches of Calif. Took over six months. So I am adjusted. At this moment I gather lots and hang out at the building department.
You see you had a good conditioning seller cars. I wish I had. Gathering the lots is very similar as I have restricted capital. So I do everything but hold my fingers over the really important words on a contract.
Wish me luck. Cheers Lucius
Wow!!!
You got 20 more lots in one day?
That's better then Tinman's legend I've been reading about on this site. Very good! Very good Mr. Foster!!! Please let us know how did you do additional 20 lots in a day or two? WOW, I can't believe my eyes....
I found a developer who had just had his license pulled, his wife just admited infecting him with small animals who walk sideways and his dog contacted a disease he says he got from a lamp post. He scalded himself on coffee this morning and when in a moment of lagese he tendered a credit card in payment it was declined. I picked up the check. A small one of course.
It was at that moment I suggested that he allow me to help him from having to pay taxes and brush clearance costs on a few lots. Actualy it was 22 lots. He still owns them I have just leased them for 99 years. I have options to purchase for the next 10 years. My cost per lot is to pay the taxes and each lot has a lease payment of $10 a month.Such payment to begin 60 days after filing notice of completion. Works for me and it is good for him. He still shows the lots on his financial statement and he does not have to pay real estate taxes. There are no bonds against the properties, and no mortgages, just how he did that I do not know. He promised to tell me. He signed an agreement and appears happy and satisfied. He realizes that his way of doing business is no longer applicable in these times of spiraling values which are based on transitory clouds and heavenly rumors.
. I learned this little method the other day from a private message from a Newbie.
Cheers Lucius
I wish you luck Mr. Lufos. Keep up a good building department work. Don't give up!
One question. What do you do every day when you got there? Just hang around making jokes hoping the ice to brake or ... why don't you tell us? Luve to learn few-new grinder tricks.
Dear Kathleen
We do it to generate income and of course control of transaction. It is not necessary, you can go to an Escrow Company, tell them what you contemplate doing and they will set up for you and charge you about $400 a transaction. We prefer to have that money stay in our organization.
As to the loan committment, we got it by creating a combination construction loan and a take out. All the same loan. As the Buyer goes on title you merely update the existing policy of title insurance and this way take advantage of big price breaks. Remember I am cosigning all of these loans. Thus no prequalification is necessary. Most of the people for whom we are trying to house have no credit. In some instances they cannot even get driver licenses as they are not citizens and in most cases are here illegal. We also for a fee will handle that aspect of their life and get them a Green card. Takes some doing but we have a lot of experience working with those whose backs are still wet.I do not approve of how and why they came here. But they are here and if something is not done about improving their position in life you will as they become a majority of the population have some really interesting explosive social events. I choose to try and prevent that. Besides I want to see if my solution of scatter in fill will reduce the impact that slums created as these people try to huddle together presenting sort of a common front. Ooops soap box again sorry.
Lucius
We got them in Dallas too. On each one that works, 4-6 doesn't and we the taxpayers paying-up their medical, education and other bills. Cheep labor? I don't think so. Now with this cheep housing project, again for them, this all sounds like affirmative action baby Chameleon to me.
My 2¢
For god sake NancyChadwick you must be at list 3 decades younger then "Dear Mr. Foster", as you once intended to call him. That alone should be enough to earn him a brake when he forgets the key moments from one of his inspiring tails.
Why don't you tell us a bit more about yourself? You can keep it busyness and miss out the stories about the boys, etc. May I suggest you loosen up or I'll have to invite you to Texas to learn to scream the real Yahoo!?
I'm afraid you missed the point, DealerJo.
Dealer Jo,
It was our calculation based on the information from Los Angeles Housing that there was a need for at least 16,000 single family housing. Two to Three bedroom. There does not seem to be that much space even in the getto housing projects.
My targe is only 3,000. Why, well thats all the farther out I can think. If I do 3,000 by that time with the little mobile factorys going, I can reduce my costs and that means additional improvements. I would like to battery equip and not with lead acid. I have seen a perfect system. Batteries sealed and auto charging system that only allows input current from panels when necessary, and watches the batteries for any malfunction. Cost $1,600. I cannot afford it. But if I am in modular factory production I can. The radient floor system has a new model out much smaller diameter of pipe and they are flat oval which means they do not take up as much space. To convert to this system an additional $400. But if I am in factory production $125 additional cost.
So you see where I am going. You do? tell me.
Lucius
Yes I do see.
The speed of execution is the key. Maybe you can keep the core of your intended program, which I understand offers "cool and cheep housing" inserted on the very hot market. That alone raises my left eyebrow but then, with a slight change off the variables such as building material may allow Building Dpt. to (un)stall. What do you think? My thinking goes with variable probability approach?
You see, the inherent steel box geometrical shape is nice but is an overkill and name "container" doesn't help. It takes away. Imagine for a moment Jose calls back in Mexico and says: "Holla, I just bough my container house...". I cant imagine that because don't forget, they are very proud people. Living in container is not what one would consider a pride buster, per se.
I would look into keeping the shape but frame with sticks and wall with some 21 century, Styro-sandwich materials that goes well with solar collectors and radiant hit floors. Changing the materials might be the key. You keep the land lease but you give up the steel and DO not vary about the cost. $150K is still way to cheep for your aria, based on Realtor.com.
Do you need partner?
You Ms Chadwick, are a wise, bright and VERY patient woman!!
I do wish, though, i'd not sworn myself to silence on certain matters!! 
And, you, Mr Lucius, are my hero.
*lol*
Opposite views from opposite sides of the country. I'm stuck in the middle in MI, where lots are avail for under $1500.00 We could make a killing in the northern part of the state with "Vacationtainers"
becki
Becki, thank you for your kind words.
Even in areas where property values are depressed, I have to wonder that sooner or later, a firestorm of opposition to this scheme will set in when existing property owners see low-income housing being plunked into their neighborhoods. Their perception, rightly or wrongly, that their own property values will suffer may become their reality and thus the reality of their elected officials.
My Dear Becki,
Do it, no need to wait. You can do it all by yourself. Vacationtainers, a flair for words and that is creative. What fun you will have and where better to be then in the Middle of everything. Lots at $1,500 my god, sounds like heaven on earth. Do not hesitate on the moment of thy going. Do it. Keep me advised as curiosity is my middle name.
Lucius your ardent admirer.
I am afraid I didn't NancyChadweck.
Likewise, a new point might have been made; one you too might wish to (re)discover? Perhaps?
DealerJo, oh, I'm sure you'll understand once you read all of my prior replies and the replies to those.
NancyChadwick, oh, I did. But, I couldn't find any indication as per your primary occupation? Land developer? Builder? Realtor? Teacher? Please do share with us! I am sure many members who enjoy your posts as much as I do would love to learn more about mysterious NancyChadwick.
You speak a truth.
In a very nice lower middle cl***** whatever that means, there are some 200 houses of similar design and shape. They are our usual mix of Spanish Colonial, Cape Cod and smished Ranch Style, (extended roof lines with low peaks and board and batten exteriors. Some have hitching posts for the horses they wish they owned. No not the ones they married! But the builder under some divine control stopped short and has scattered among these housing darbs a few lots which he did not build. He knocked himself off a few years back, sort of an Artistic Architectual concept of the dwellings he had built. Really strange. The second bath is connected to the Kitchen and thus out of the path of ussage on his three bedroom homes. Very strange. Maybe he was a Kitchen Freak, that might explain the rather strange table in the middle of the kitchen.Ah well whatever. I attended a meeting of some half dozen home owners who had heard of my purchases of land and wanted to know what was going on. I informed them that my purpose was to introduce into the neighborhood persons of rather low incomes at the present but who appeared to be on a fast tract into full acceptance of our strange customs. The kids were already enrolled in the schools of the area etc. When I mentioned the price of sale they all of course freaked out and explained to me like I was some third grader what effect this would have on property values. I pointed out to them that it would have no effect as this was a one time sale only to a selected person er family. From then on the sales of these new houses would reflect whatever the prices were in that subdivision. A moment of quiet, then you guessed it. They all wanted to buy. Why, not for the new type housing but to participate in the quick buck. Oh god we are so simple, will we never grow up. I should talk I am 82, walking around like I was 100 with three busted ribs and a shuffle. Oh well. I think this answers the question. At least it did on this one occasion. There will be others.
Cheers, the limper, non cougher er laugher.
Lucius
Lucius, I have 2 types of questions...
First, how did you break 3 ribs? Were you involved in a pick-up game of baseball or was this RE related? How are you feeling?
Secondly, I thought you intended to either do long-term leases or put some deed restrictions in place on these lots once the vertical improvements were "installed" that would prevent or substantially delay conveyances. Did I misunderstand?
In the future, watch out when people are taking wild swings and always duck or jump when you see something flying in your direction. (Tommy LaSorda can coach you on how to do that.) And whatever you do, don't go to a game pitched by Pedro Martinez. (Don Zimmer can tell you why.)
Nancy
and.."me too"
by the way Lucius, fallowing advise re/ broker lic.
micidavid.
Smart move. I am a firm believer to get as much qualification as you can. You do not have to use it but it helps. I went to law school at night and never would practice law, but the JD is helpful when you need to use it and the PhD is useful when you need it to teach or lecture or whatever. The Real Estate Brokers license is also helpful although I must admit some of my fellow licensees
are But Heavily Challenged. But it all helps.
When I was a Sgt Pilot in the RAF nobody listened to me in spite of all my combat time. When I finaly got promoted as a Sqdn Leader like a Major, they listened. Same stuff but for some reason the rank and the ribbons made a difference. Finaly the United States came into the war and now I am back down to 2nd Lt. Two years of heavy combat experience but once again nobody listened to me and of course they suffered heavy casualties. Really dumb.So load up on the goodies, they really mean very little it is you and what you can do that really counts but people are funny. They do look at those things.
Cheers Lucius
Yes, I understand. It's Spring. The time of the year when strange things happen to people and their animals. Perhaps this year a bit early, but what meters more is the sweet fact that your lot number still climbs. Perhaps another few today?
And, what happens with those lots you can't tie up or purchase with options? A word commission crossed my mind. Did it cross yours? Why p***** on something that can still be turned into handful of cash or... a nice car.
Because I screwed up a little on the last group of 22. Seems that an IRS lien has popped across all of them in a very large amount. I missed them as it had not been picked up by the Title Co. Was picked up the following day.
To clear the lots so that I can build on them I must remove or get partial releases from IRS.
I propose to file with permission of owner an Offer In Compromise. I then intend to if denyed follow up with a request for partial releases lot by lot as I go to build. I think a rather small sum per lot will handle as I have seen this done before. Calls for preparing a proper case with appraisals etc. et. in a submission for individual lot release. Once having done it then try to duplicate it one by one and get the lots released. If not I have just screwed. up. Not the first time nor the last time. Talk about tying up a piece of property yip.
Cheers crestfallen Lucius
Slow down Dealer Jo,
I am trying to catch up. Most of the ones I did not get are tooooo overpriced. Can you imagine a guy that wants $165,000 for an R-1 lot in an area where the high sale is $375,000. I passed, but since your post I have called him up and offered a joint enterprise. He puts up the lot. I put up er assemble the house and we split the profit. If any.
This one will not be Low Cost Housing. Thanks, good thinking. I owe you a meal, any time back to Chez Denny's.
Lucus
I would not dream of subjecting any person to involvement in this project until I am much farther down the road. I have experienced intense hostility from persons in authority. Even the local Unions had rather heavy missgivings. Ah well perhaps I should just change my name to Putz and get it over.
To solve the problem I went to a local politician very high up in City of Los Angeles. You know the type, went to USC cause all else was denyed and he was a Legacy. His highschool er excuse me prep school record look like a collection of incompletes and just made it like I have never seen before. But he has risen, Ah Men. His suggestion after dinner at the Diners, three Armanac and two Martinis was to stop sounding off on the social impacts. Get away from City of Los Angeles permit factory, and go prove my point in the County of Los Angeles and permit only for a single lot, single person, just building a home. Owner Builder. He will supply me with the areas so I have friendly inspectors. This usualy means young ones with no long history in the trades. Just do it the hard way and if I have to do a gladden covering of the exterior so it does not have that ribby container look. He also suggested changing the rooof line with a one way sweeper. That slanted into the South so I can mount panels to catch the sun for electricity production. He said keep it low key, No corporate names just a dummy single person doing a house all by himself.
Also go up into Kern County (North of LA) do one there. Keep them simple and cheap. Leave room for lots of bad taste furnishings and who knows what.
Then and then only come back to LA City, and with a record of completions and acceptances and a Certificate or two of Occupancy. Then start in. Stay away from HUD no matter how much you could use the money. Pretend FHA, and Freddy Mac did not exist. There is a rather large executive disturbance going on in these organizations and no body knows what comes next. Can you imagine what would transpire if they shut down and the secondary market ceased to exist? Yip, lots of fun. Back to the Three Field System and Right of the First Night, loved Medievel History just never thought I would get to live it.
So thats what I am doing. Out to the desert.
Relax, after this phase is finished I will make a publication available at no charge to all the members so they can duplicate in their areas. Right now let me take the point. Besides I busted three ribs the other day and have relearned the meaning of pain. Every time I cough or laugh I am tempted to say a quick Hail Mary er something.
All will come right. Cheers Lucius
Perhaps in your next incarnation you will learn more, DealerJo.
That's sounds great Lufos. I hope it all works fine for you in the end. Keep us posted!
Dear Mike,
I really do not know where you would read up on this stuff. You might go to law school and take a first year cl***** in contracts. God knows the attorny's of this world have created masses of contractual agreements which just about cover everything.
Frankly I suggest you just go out and do it. Sort of stumble around.
Dear Mr. Seller." The price you have named for this lot is offensive and is so far past the point of reality I can only assume that you are on something. In view of our inability to connect as to value. The least you can do is share some of the smokable substance that you are using." Now that ought to be good for a joint of two.
Actualy what you do is show him that perhaps he does not need to sell the lot. Perhaps he has an ongoing love affair with dirt and has abandoned intercourse with other members of Phylum Mamalia. And you can help him. You will lease the lot and here comes the kicker, pay all of the taxes from this day forward. You then take the number of months in a year, times that number by 99 and you will have the number of payments he, she, or it will receive. You then take the amount he wants for the lot divided by all those payments and thats the monthly payment. Or if you like arrange to pay him every year if he likes to receive a larger sum.
You now have control of the lot. You will charge the ultimate buyer of the house a leasehold monthly fee which should be at least twice the amount that you have to pay out. This is a little additional payment which while it may not mean much to you, will make your grandchildren estatic. Now do this a few 100 times and you will become a legend to future generations.
Just a simple lease. Go to a form book. Buy if you must the first year book on contracts and peek in there and see how others through the ages have done it. Nothing new. God I wish I was original. Its just the same old stuff.
Cheers Lucius
Sure, I would like to be a part of the "solamente merenge" to. Take the fog out, how does it realy work? Do you give us a money to buy the land you like for you and then you are the owner and we just do run hopping to make buck or two? How does it work? Can't figure it out!
Dear John 29,
I just noticed your comment. Foregive the delay and if you never read this I will understand. Besides with all this Reality Television who has time.
My purpose was never to play a game and lead a crew into glory and victory. My purpose was to try to head you into the paths of profit all by yourself. You do not need me nor in fact anyone. It is you that must do it and I know you can do it.
I just feel that control of Raw land is where it is at. If you see a need for low cost housing then god knows I have posted enough stuff to expose you to the need. If in satisfying the need you can become rich, why go for it. It is the American Way. Besides it is a hell of a lot of fun.
If I had the time right now I would suggest you check some of the postings around the time period of June 27th to July 1, 2004. Check out the non interest loan as a method of purchase of properties which are on the Spike. It takes the Spike out and delivers the property at below market. Now that is just a matter of intensive closing. Thats what this site is all about The Creative Investor. The Creative Investor is he who can Negotiate a closing which is favorable to Him or Her or even It!
My best, do it, enjoy it. Time is a fleeting
Lucius
My Dear Nancy,
So nice of your to ask about my broken ribs, really dumb, I saw a very strange type car go by and attempted to turn and look without proper preparation. I dun fell and covered the fall correctly except I did not see a rather large concrete car stop and my ribs took the full pressure of the fall. So I laid there and contemplated my life. Perhaps I should have gone into holy orders, or at least taken a long ago vow of celebacy instead of waiting for it to develop naturaly in the passage of time.
I must tell you my sport was Fencing. did it all my life, went to two World Meets, qualified for an Olympic team slot and the Air Force would not let me go, always found some other more pressing task. This sport requires intense and ongoing concentration. So much so in fact that the only thing I know about baseball is that the actual ball is round. The only Dodger I know anything about was "The Artful Dodger."
I must say it is very annoying. Everytime I laugh or cough I think I am terminal. I have said so many random Hail Mary's the Pope is thinking of having me beautified. Time they had a good looking saint.
The Doctor was really helpful. I suggested that he might like to tape them up so I would not keep on feeling that someone was sticking a very sharp dagger into me.
He grabbed me and squeezed. For a moment I thought he had gone mad or was having a gay moment. The pain was emense. "See he says, they just snap right back into line. Most extroidinary, you are very very lucky. No there is nothing that we can do for you your bone structure is perfect."
I suggested he might like to prescribe a small narcotic. Like ten ounces of Morphine.
He laughed and said, I could handle it. I keep thinking I must have foreclosed on him some time in the past. Revenge at last.
In any case I am in our new soon to be Condo. We came in right before conversion. Seems they are having a bit of bother with some of the tenants. I have suggested that it be solved by a little game playing with interest rates and time periods so that the older tenants will have a deal and not scream and yell preventing the Condoization. We have moved up. No more weekend firefights from the neighbors. We can forget all of our gang signs they are needed no more. This is the great middle cl*****. People do not repair their cars on the front lawns. They mow them and exchange friendly greetings. Yes some even play golf and other entertainments of the middle cl*****. I will adjust, that is as soon as I can breath without uttering the kind of curses that would have had me removed from Spain or entrusted to the kind embrace of The Iron Maiden, during the time of the Inquisition.
But thank you for your interest.
Usualy I do put restrictive devices in my sales agreements. But then sometimes carried away with my upcoming SaintHood, I leave them out.
Cheers Lucius
Lucius,
I do hope that your albeit perfect bone structure realigns itself quickly, permanently and with decreasing pain. Please take care of yourself. You are a treasure without peer.
Nancy