If you plan to invest in land in the St. Louis area, Cardinal Realty Group is here to assist you. Get in touch with them 636-225-0385, send the an email at Info(at)CardinalRealtyGroup(dotted)com, or visit their page on multi-family properties in St. Louis Metro.
Land in the St. Louis Area
The total dollar volume of sold land in the last quarter of 2017 was at $15,938,801, higher than $15,214,226 in the third quarter, and lower than $19,633,515 of the second quarter and $30,494,835 in the first quarter.
The majority of land sold in Q4 was worth between $500,000 and $1.49 million, with a total of 47 land properties sold. Only one land property sold was worth $10 million or higher.
St. Louis’ Land Reutilization Authority (LRA) owns over 11,000 parcels of land in the city. It has the oldest land bank in the nation, which was established in 1971 by way of a Missouri state statute.
The LRA is in charge of land properties if owners are unable to pay taxes over a three-year period and if it doesn’t sell in public tax foreclosure sales in a year or so.
The LRA, in turn, sells these parcels to entities and individuals who are willing to develop the property.
With city-owned properties, construction must be completed within a 12- to 18-month period. During the purchase process, buyers must show that they have the funds and resources to finish construction within that timeframe. A real estate lawyer can assist you throughout the buying process.
Buying Land in the St. Louis Area
It is generally advisable to conduct an inspection to evaluate the land property’s external condition, as well as get an impression of the neighborhood it’s in. Decide what it is you want done with the property, and gather the funds you need for the expected costs. As mentioned previously, you must be able to demonstrate your financial capacity.
Once you’ve inspected the property and made calculations for the costs of the project, you may get in touch with the LRA and make an offer.
You may also inquire about making an Option to Purchase, which gives you control of the site, but not ownership of it.
The option fee is typically 10% of the purchase price and gives you sufficient time, about six to 12 months, to secure financing for the project. Your fee gets forfeited if you are unable to close the deal for any reason.
Why invest in land?
There are many reasons to invest in land. For one, it is a hands-off investment, one that doesn’t require repairs, replacements, or renovations. And since there’s structure on the land, you won’t have to deal with tenants, rent collection, and maintenance.
Your primary concern stems from whether or not the land is suitable for building. As long as there is someone who can build on the land, you can expect to see high returns.
Moreover there are fewer investors who deal in land sales. As a niche market, there are fewer competitors, and landowners in general are motivated to sell because they do not live on the property or anywhere near it.