Archive for October 2010

When is real estate cheapest?   Leave a comment

When there’s nothing on the land!

See, investment made easy. But it’s true… think about it from the top down. Let’s work backwards. In today’s market, out here in Calgary – specifically, in my neighborhood, according to the Calgary Real Estate Board – the average single-family home sold for about $385,000. That’s the sale price in what is considered a soft housing market, and one that shows indications of improving in 2011.

That’s a good number. That’s also about how much it’d cost to move into a new home, built by the average homebuilder, not only in Calgary but several Albertan markets.

Backing up a step, the homebuilder that sells you that home has bought that serviced lot – the land, that stake in the ground when you look for that place you want to live – for approximately half that price. The cost for a developer to get that lot ready and appealing to any homebuilder will vary, of course, but a serviced lot will cost anywhere from $120,000 to $200,000. This IS quite variable, but dependant on location, proximity to other amenities, and so forth. So let’s say the homebuilder buys the lot from JoeDeveloper for $190,000. The lower he can buy it for, the better, because it helps HIS margin when he sells the house he builds on it to its eventual owner. So to summarize thus far, the homebuilder will buy the lot, and build the house, for about twice what he paid for the lot.

Let’s back up another step. The cost to develop a lot from raw land also varies. For example, if the raw land is relatively close to pre-existing “features” like sewer lines, or paved roads, it’ll cost less to develop that land than it would to lay a long line of pipe “from scratch”. Because of the geographical challenges, the potential necessity of providing these service features, etc., it could cost anywhere from $40,000 to $80,000 to service one average-sized lot. Could be more. Probably not much lower, but these figures – and all of these figures – are subject to the market’s whims. So if JoeDeveloper gets the lot all nice and shiny, and it costs him that 80 large – and he SELLS it to BobHomebuilder for $190,000 – he also makes out quite well in the transaction. Again, the transaction equates to about double its original “cost”.

Let’s take ANOTHER step back… the developer has to purchase the land from somebody in order to develop it, right? Well, at this point, the value of the land itself is probably at its lowest, most variable, and most speculative position. JoeDeveloper has to determine how much he’s willing to pay someone for the raw land he wants to work on, after he’s determined how much it’ll cost him to develop it. To use really simple math, he’s not going to buy it for a dollar, develop it for two dollars, and sell it for three. No profit.

JoeDeveloper has wiggle room at both ends. The LOWER he can purchase the raw land for, the lower his END COST (land plus cost of developing) is going to be. His goal is to keep his costs down, and his selling price to BobHomebuilder up, so that he makes ths most money he can. What Joe has to do is determine that offer price where he’s confident he can get the land, develop it, and sell it for the best possible margin he can.

Owning that land when the offer comes in? That’s the best place to be. You’re not paying to service it. You’re not paying to put a house on it. It’s the least expensive point to enter this pipeline of profit… when there’s nothing on the land.

Advertisements

Posted October 29, 2010 by JasonMacAskill in Uncategorized

Rangers in five   Leave a comment

I had two good meetings today – the first was short, with a potential investor that was quite experienced in land investment. The second was longer, and this fellow was more attuned to real estate. He asked the right questions, though; BOTH of them did. They both wanted to know how long it would take to see their money… and both times I told them that I didn’t know. “What a foolish thing to say,” you just said in your mind. But it’s not, honest.

Every project is different. Every project will sell when it’s ready to sell – the local government(s) has to approve our planning, our development teams have to get the land ready to market, and the buyer has to come forward with a solid offer. When will our projects in central Alberta sell? Here’s when – not today, but soon enough for all of us to reap the rewards of waiting. That’s the most honest answer there is.

World Series starts tonight. My bold prediction is in the subject line. As good as the Giants’ pitching is, Cliff Lee is off the charts. Even if Lee goes 1-1 in the Series, the Rangers have too much offense for the Giants to hang with them, and that’s without Texas using a DH for the first two games. Looking forward to see Vlad Guerrero in the outfield, though. And I hope Josh Hamilton gets some pitches to hit.

Oh, and I twitter now. Just my blog posts so far, but I’ll do other stuff too. The landingwithjason name was one character too long (curses!), so if you need to know where I am , here you go: http://www.twitter.com/jasonmacaskill

Posted October 27, 2010 by JasonMacAskill in Uncategorized

Let’s talk Rock… as in Tim Raines   Leave a comment

I’m a big baseball fan.  A HUGE baseball fan.  I love the stats, the history, the debate and the comparisons and just about everything else associated with the game.  Growing up, I was a Montreal Expos fan, and to this day I think it’s a damn shame that those amazing teams from the late ’70s and early ’80s never made it to the World Series.   At least I could take solace in the fact that, long after their careers were over, a pair of Expos eventually made it to the Hall of Fame.  Gary Carter and Andre Dawson were two of my favorite players when I was a young lad, and they waited far too long (especially the Hawk) to be welcomed to Cooperstown.   I fear that they may be the last Expos put in, and if that’s the case, that’s a travesty.  Tim Raines is just as deserving – and if you believe several well-qualified baseball people, he’s more deserving than either Carter or Dawson.  For that matter, more deserving than several Hall of Famers right now.  My favorite fact on Raines is that he reached more times than slam-dunk, first-ballot, nodoubtaboutit outfielder – and peer – Tony Gwynn.  That’s no knock on Gwynn, who won eight batting titles while  tallying over 3,000 hits; “Hall of Famer” BELONGS on his resume.  But if Raines’ primary job in the major leagues was to get on base, and to score runs – as is the object of the game, right? – then isn’t he a shoo-in as well?   My belief is that the biggest thing keeping him out is that he’s inevitably compared to a man who had the same job and played at the same time as Raines – Rickey Henderson – and Henderson was the superior leadoff man and baseball player.  Well… so what?  Henderson’s one of the greatest players of all time, just ask him.  If the benchmark – no, if the cutoff line – is Henderson, then how does one compare?  Rickey was a freak of nature, and I mean that in the best possible way.  But that doesn’t mean that Tim Raines doesn’t belong in the same conversation.  He CERTAINLY belongs in the same Hall of Fame.   And if you don’t believe me, then check this out: http://raines30.com/reviews.shtml

 

Media_httpmopupdutyco_ikayy

Posted October 26, 2010 by JasonMacAskill in Uncategorized

FDR is A-OK   Leave a comment

The leaves got raked, the outdoor furniture got put away, and the snow fell, roughly in that order over the weekend. That last burst of summer we had is pretty much gone now. Only six months to go until it returns. Whee.

Today, I’m going to offer you the quote that we at Belterra use when describing land investment. Franklin Roosevelt said the following, way back when, but it holds up just as well now: “Real estate cannot be lost or stolen, nor can it be carried away. Purchased with common sense, paid for in full, and managed with reasonable care, it is about the safest investment in the world.”

Far be it for me to argue with the 32nd president of the United States.

He’s right, of course. When someone invests their hard-earned, carefully-saved (or fortuitously inherited) money with us, we make darn sure that the land IS safe. Due diligence is key… if it’s nothing we ourselves would want to invest in, for ANY reason, then why on Earth would we try to market it?

Well, we wouldn’t. Belterra finds land that is environmentally sound, and just as importantly, in the path of urban/suburban growth. Land that, by all indicators at our disposal, will be used, and used moderately soon. Land that we can develop toward future residential, commerical, or industrial use. And for someone holding a registered piece of it, it is indeed a very safe investment. Makes me wish I could set up a meeting with Mr. Roosevelt…

Posted October 25, 2010 by JasonMacAskill in Uncategorized

Coffee’s for Jedis   Leave a comment

So I finally got around to watching the Alec Baldwin scene from Glengarry Glen Ross. You know, where he gives THE speech to the old salesguys in a seven-minute-long tirade of emotionally-charged, profanity-laden, arrogantly intense dialogue.

And I couldn’t help but wonder if the same message would have resonated with me even MORE deeply if it was delivered by Alec Guinness instead.

Media_httpwwwsawforgn_zyngq

“You see my light saber? You see it? My light saber cost more than your car.”

Posted October 22, 2010 by JasonMacAskill in Uncategorized

It’s a small, small, small city   Leave a comment

So I attended a networking event yesterday afternoon. My first one, and it was very enjoyable. There were about 40 people or so there at any one time, and I met several interesting, engaging individuals.

I live in calgary, a city that boasts a population of about one million people. Depending on how you want to count people in or count people out, it’s a nice, round number that works for the purpose of this story.

1,000,000 people. 40 at this event. With me so far?

So I chatted with about a dozen people… just a fraction of the total number of attendees at this event. After a few minutes chatting with one fellow, we discovered that we both liked baseball, and knew a mutual friend. Another young man I spoke with knew another different mutual acquaintance who makes her livelihood in social media.

Small city, indeed.

Posted October 21, 2010 by JasonMacAskill in Uncategorized

Why I’m here and what I do   Leave a comment

I sell and invest in land.   That’s not the end of my blog today.  Though it’d be remarkably easy to end there.  However, that really wouldn’t tell you much.   I started working at a land development company about six weeks ago after my friend – one of the partners in the aforementioned company – convinced me it was an opportunity I couldn’t pass up.  And after six weeks, I still believe him.  It’s tough going: I still feel positive about the business itself, and I’m still satisfied with my career change (again, very positive about that).  This difficulty I’ve encountered is caused by a combination of factors, all of which add up to make what I do a bit challenging.  But I’m not giving up, hell no.  THAT would be the most ridiculous thing I could do at this point in time.   Wanna know why it’s a challenge?  First and foremost, I’m a self-centered kind of guy.  By that, I mean I tend to think inwardly a lot, and I’m not very expressive.  Note my use of the word “centered”, as opposed to, say, “absorbed”, or “agggrandizing”.  It’s just who I am.  But I’m also someone who, when you get me on the right subject, I’ll let it all out.  Baseball.  Comic books.  My family.  And now, I’ll also talk about land.   It’s also a challenge because people – regular folks, living day to day – probably don’t think of land as an investment option.  Too expensive.  Too much bother.  Not safe.  Illiquid.  And so forth.  Well, it’s my job to present facts that show otherwise.  It doesn’t have to be scary, but it requires some research, and time, to make such an informed decision.  I can help.   And on top of that, I have to call on everyone I know to tell them about it.  I don’t mind doing that at all, but it takes time.  Also, even my friends and acquaintances are a little leery when I talk to them about this after months or even years of not talking to them at all.  And I suppose this goes back to the previous two points – I’m generally quiet, and it takes time and effort to re-connect.  I suppose it’s time to open up and do things for people rather than stay in a comfort zone with me and mine.  I can do that, too.   That’s me.   But that’s not all I plan on using my blog for, merely promoting the fact that I think investing in land is one of the safest, easiest, and LESS stressful ways to use your money.  If I don’t try to tell you about me, then why would you (whoever you are) care at all what I think?  Blogs are the handshakes of the 21st century.  Here’s mine.  I’ll let go this time, and write again another day.

Posted October 20, 2010 by JasonMacAskill in Uncategorized

Angus   Leave a comment

So I finally relented after several years of asking… and bought a dog.   More precisely, a 13-week-old Yorkie.  He really is one of the cutest puppies you’ll ever see.  And truth be told, I do not mind having a dog.  Really, I don’t.  I’m already quite fond of the little guy.  But the timing, to me, never seemed right.  It’s a busy enough household as it is, and with a tiny dog underfoot, and the demands of caring for same – well, the circumstances had to be right.   Luckily – he said sarcastically – it was a call to action that took no time at all.  Decision made Thursday, puppy looked at Friday, picked up and brought home Sunday.   You’d think the rest of the family knew I’d finally cave.   My next post: why I started a blog to begin with.

Posted October 18, 2010 by JasonMacAskill in Uncategorized

Worth sharing, I suppose   Leave a comment

So I ran across this quote today on one of the websites I frequent… it made me realize how good I have it, and why it’s never as bad as you think it is.     “…My contract just ended a couple of months ago. I was making a lot of money. So what should I do? Complain? You have to readjust. Whereas before, what I was making in one week, now maybe it takes me a month to make it. Maybe two months. That doesn’t mean I should stop making it. Before, I could pay my bills with one job. Now it takes two. Don’t mean I should stop living or stop trying. I got the opportunity, ways and means, to support my family. It may take a little more effort, but I should count my blessing that I have the ability to do that.”     You gotta do what you gotta do, and you might as well try to do it the right way…right?

Posted October 11, 2010 by JasonMacAskill in Uncategorized

Feeling good   Leave a comment

Had two good meetings this week with a couple of pals.  Confidence is high.  Morale is strong.  Need more Diet Pepsi.

Posted October 8, 2010 by JasonMacAskill in Uncategorized