Getting Started with Buying Land in USA

I am from India and back there buying land as a investment vehicle is pretty common and profitable venture . The same works in USA as well if you put in some time to research and buy right piece of land . Let me walk you through various aspects of buying Land in USA

Basic concept behind investing in Land is that it is a scare commodity and cannot be produced . As population grows demand for land will also increase . Common types of land investments include

1. Residential development land
2. Commercial development land
3. Row crop land
4. Livestock-raising land
5. Timberland
6. Mineral production land
7. Vegetable farmland
8. Vineyards
9. Orchards
10. Recreational land

In this part I will go over Residential land and  Commercial Land 

How to buy land in US

Back in India we have lot of opportunities to buy land as small plots and hence easy for a single investor to buy a lot of his/her choice but In US land is majorly available in acres and it would not be possible for a single investor to buy . So most of the lands are bought as group by forming a LLC . A Limited liability company (LLC) is a business structure that offers limited liability protection and pass-through taxation. As with corporations, the LLC legally exists as a separate entity from its owners. Therefore, owners cannot typically be held personally responsible for the business debts and liabilities .Advantage of this approach is that the property will not show up in your credit check and you can be part of the group to buy the land and can share the risk or reward of the purchase .

How to search for right piece of Land

As with every investment finding the right piece of land to buy play a major role on how it would grow over next few years . Here are few points that I check when looking for land 

1. First narrow down on the state you want to buy the land , check how the job market growth is in that state, how is the inflow of people from other states 
2. Check for lands closer to city with possible expansion and look to buy land which is less than 10K per acer such lands have more scope to grow
3. Once you short list few lands check if there is any flood plain in the land . You can search for the location in this site(https://hazards-fema.maps.arcgis.com/) and check  
4. ​Check for what utilities are available in land like water ,electricity and sewage . If they are not available then getting them to the land will involve cost also check how far are the nearest utilities from land
5. Land should have road access this is important for future development and accessibility
6. Check what zoning that land belongs to and any possibility of changing the zone in future  
7. Team up with your local realtor and tell them your criteria and also ask them for any potential properties . Keep following up to show your interest and show that you are a potential buyer . If any land comes they will reach out to you first 

Here are few sites that you can use to search for lands for sale 

• https://www.loopnet.com (This can also be used for other types commercial real estate)
• https://www.landwatch.com
• https://www.landsofamerica.com

Process of Buying Land 

Once you finalize on the land and hire a realtor to work on negotiating you need to form a LLC with group of people buying the land . Once a LLC is formed with right percentage of ownership documented you need to pool in required money for downpayment . Before closing the deal a land survey is done to check if everything is as specified by seller . This process can take anywhere from 60 to 120 days . My choice of financing land is to take loan since you get more leverage and since we sell the land in couple of years you get to profit more .
          Let's say your share is 100k and 30K down payment is reuqired . When you sell the land for twice its price then your share will be 200k. Now 200K  - 70k loans which is 130k .is your profit for 30K investment . These  are the 2 things that will surely help you find a deal 

• When ever you talk to your friends check where they are investing and check with elders may be 5 to 10 years ahead of you for advice .They would have already invested in couple of places and will be happy to help you out . Let them know you are interested in investing and they will surely pull you into any good deal they find 
• Have close contact with a local realtor . Show them you are a potential buyer 

I will keep improving this article with more knowledge I get with my investments . Let me know if you have better ways of investing .