Beginner Series - The Potential of Land Assemblies

The Real Estate Espresso Podcast

Beginner Series – The Potential of Land Assemblies

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Introduction to Beginner Series – Land Assemblies

In today’s instalment of our Beginner Series, we will explore the potential and process of land assemblies and how it can be a profitable venture for novice and seasoned investors alike.

Understanding Land Assemblies

Land assemblies are a practical strategy for real estate development and wealth creation. They entail the acquisition of multiple parcels of property, reassembling them into a larger entity that is more valuable when combined than as separate entities. However, to grasp how land assemblies can yield such substantial returns, it’s imperative to understand that the value of a plot of land is tied directly to the potential uses it can be zoned for. For example, a plot of land zoned for agricultural or rural use might command only a few thousand dollars per acre. If that same plot is suitable for a residential subdivision, it could be worth a few hundred thousand dollars an acre, while a forty-story building could push the value into the millions.

Case Study: Philadelphia Housing Authority Auction

In 2011, my team and I participated in an auction organized by the Philadelphia Housing Authority. We ended up acquiring 15 properties from that auction for $350,000. Four of these properties were located on the 1700 block of Ingersoll Street, which was in deplorable shape. At first, we assigned practically no value to these properties. However, a spark of insight led us to consider assembling an entire city block instead of dismissing the lots. After five years of strategic purchases via different entities, we assembled 19 properties, raising the economic potential of an otherwise neglected city block substantially. As a result, today, the 1700 block of Ingersoll Street hosts individual townhouses, each sold for an average price of about $450,000.

The Potential of Land Assemblies

We have conducted multiple land assemblies not just in Philadelphia but in many other locations as well, uncovering and capitalizing on hidden real estate values. Our approach has been to patiently assemble targeted pieces of land, ensuring that the development potential rises with each addition. Importantly, recognizing an opportunity for land assembly and understanding zoning bylaws are considerable parts of the strategy.

Checklist for Successful Land Assemblies
Knowing zoning bylaws to identify properties with potential value increase.
Plan for the end goal: What development do you envision on the assembled land?
Task due diligence on each piece of property before purchase.
Have a strategic acquisition plan to discourage speculation.
Be patient, land assemblies may take significant time.

Land assemblies can be complex, but when executed correctly, they offer considerable return potential. As experienced real estate developers, we’ve harnessed the power of land assemblies to diversify our portfolios and enhance our overall returns. Whether you’re an experienced investor or a beginner, understanding land assembly can escalate your investment strategy and broaden your opportunities in the real estate market.

Feel free to follow us to stay updated on our work in real estate development and to learn more about land assemblies and other real estate investing concepts. Thank you and make great things happen today!