Financial Recovery Through Land Banking
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1. The document discusses land banking as a solution to retirement challenges, as social security provides most retirement income but averages just $1,300 per month. 2. Land banking involves acquiring select pre-developed land in growth areas that will appreciate in value over time, providing higher returns than other options. Examples show properties appreciating by over 10 times the original value. 3. California is presented as an ideal location for land banking due to population growth, limited developable land, and economic strength in major metro areas like Los Angeles.
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Financial Recovery Through Land Banking
- 1. Financial Recovery Presented by: Michelle Shaman Land Banking Executive GreenDeed is a trademark of ACE Capital Group, Redwood City, CA . All rights reserved.
- 2. RETIREMENT CHALLENGE Social Security provides 89% of ALL Retirement Income. Leaving the average American retiring on just over $1,300 per month Source: Social Security Administration
- 3. TRADITIONAL STRATEGIES Savings / CDs / Money Market Precious Metals Stocks Bonds Mutual Funds Private Equity Your Home
- 4. This chart assumes a 4% return annually on cash taxed at a rate of 25%. HOW MUCH WILL YOU NEED?
- 5. If you saved $5,000 per year, how many years would it take you to save 2 million dollars assuming a 4% annual rate of return? 72 YEARS! This chart assumes a 4% return annually on cash taxed at a rate of 25%. HOW LONG WILL IT TAKE?
- 6. OTHER GOALS?
- 7. IS THERE A SOLUTION? Safe, Simple and Smart? ?
- 9. WHAT IS THE BEST PURCHASE YOU EVER MADE? IF YOU’RE LIKE MOST PEOPLE
- 10. $ 60,000 would have bought you a nice house in Silicon Valley or Orange County Today, that same house sells for around $650,000 an 8.2% Annual Return ! 30 YEARS AGO That’s over a 10 times return on the original Purchase Price –
- 11. Just 3 to 5 miles away, you could’ve bought Five Acres of PRE-DEVELOPED land for about the same $60,000 . That’s $12,000 an acre EVEN BACK THEN, YOU HAD A CHOICE
- 12. That’s 83 to 167 times the original price… Note: Average market values from Santa Clara County Assessors Office and, as much as a $9,000,000 profit – an over 18% return. So, could you retire now on this? NOW THAT SAME LAND SELLS FROM $1 - $2 MILLION PER ACRE
- 13. WOULD IT MATTER?
- 14. WOULD THAT WORK FOR YOU?
- 15. LAND BANKING Federal Government State Governments Environmental Groups Builders & Developers Huge Retail Chains Trusts & Pension Funds
- 17. Note: Average market values from Santa Clara County Assessors Office LAND CONTINUES TO APPRECIATE, WHILE YOUR HOUSE CONTINUES TO DEPRECIATE!
- 18. Undeveloped Predeveloped Developed The Key is to: BUY LOW! SELL HIGH! THE LAND BANKING LIFE CYCLE
- 19. Rapid Population Growth Diverse Economy & Jobs Abundant Resources Infrastructure Developing Low Cost Housing WHAT DRIVES LAND VALUES UP?
- 20. Master plan for Streets, Roads, Sewer, Electric and Gas Studies projecting healthy Population Growth Existing Commercial and Residential Development Current Industries Growing, more Planned Close to an ever-expanding Metro Area Pre-school to University Nearby, More Planned Utilities in place for Huge Growth Easy to Reach by Car, Train or Plane Abundant Resources Level, Usable Land ALL 10 MUST BE PRESENT FOR AN IDEAL LAND BANKING PARCEL THE 10 KEY INDICATORS
- 21. THE PROVEN FORMULA SAFE, SIMPLE, SMART
- 24. Wind, Solar, and Ethanol ABUNDANT RESOURCES AND JOBS “ … Renewable Energy Capital of America.”
- 25. THE SOLUTION “ The Pathfinder”
- 26. This property appreciated an additional $51,491 in about 8.5 months and sold in 2008 for $103,001 This real life Pathfinder example is from an assessed value of $51,510 REAL EXAMPLE: PATHFINDER
- 27. THE SOLUTION “ The Accelerator”
- 28. This property appreciated an additional $267,353 in about 7 years and 10 months and sold in 2008 for $300,003 This real life Accelerator example is from an assessed value of $32,650 REAL EXAMPLE: ACCELERATOR
- 29. THE SOLUTION “ The Provider”
- 30. This property appreciated from $95,480 to $239,523 in less than 10 years and sold in 2009 for $335,003 This real life Provider example. REAL EXAMPLE: PROVIDER
- 31. THE SOLUTION “ The Legacy”
- 32. This 10 acre property appreciated an additional $1,181,971 in about 4 years and sold in 2008 for $1,555,515 This real life Legacy example is from an assessed value of $373,544 REAL EXAMPLE: LEGACY
- 35. START YOUR RECOVERY TODAY GreenDeed is a trademark of ACE Capital Group, Redwood City, CA . All rights reserved. 1. Land Banking is the answer 2. Identify your needs and goals 3. Define your timeframe 4. Indentify where you are loosing your money 5. Schedule your personal appointment to begin your financial recovery.
Editor's Notes
- Hello, my name is _____________ and I am a customer – and an authorized representative of “GreenDeed” a unique investment product which leverages the time-tested strategy of Land Banking to allow regular folks – like you and me – to do something about our financial goals. GreenDeed is a simple, safe and smart way to maintain your future financial independence for you and your family. Like many of you I was faced with the reality that my current financial strategy wasn’t going to meet my goals. Especially after the meltdown. Does that sound familiar? My family and I purchased a GreenDeed because we wanted a real chance to retire with the money we would need. Let me explain: But first let’s review what’s happening in today’s economy.
- How many people here would like to retire? No one plans to be dependent on relatives, dependent on charity or to have to stay working into their 80’s. I bet every single person imagines that they will be one of the 2% of American’s that will be self sufficient. How many of you believe you will have the money you want and need for retirement? <click> How many of you are counting on (or were counting on before the economic meltdown) income from more than Social Security? How many of you are counting on there even being Social Security? <click> Did you know that the average person retires on just over $1,300/month. Imagine that! Just think about your home. The recommendation is that no more than 30% of your income should go to housing– that would be less than $390/month. Would that pay your mortgage – or cover just the property taxes and utilities? What about health care expenses? What about the dreams of travel? <next slide>
- If you are like many American’s you might have left out inflation in your calculations. Or assumed you would stay healthy. Or assumed that the stock market would keep going up. We dutifully put money away each month in their IRA or their 401K. Paid their home mortgage and counted on the equity as a long term investment. <click> There are some traditional strategies that we all use to pay for our retirement. How many of you have money in savings, cd’s and the money market? Raise your hand and keep it up. Precious metals? Stocks? Bonds? Mutual funds? Private equity? Your home? So those of us in the room are no different. We have followed the advice of the gurus. We have paid their fees. And we have trusted that these traditional strategy will work. Most of us never sit back and ask – will this work? how much will I need how long will it take?
- So how much will you actually need? For your home. A reliable car. Travel. And assuming we continue to have a health care system where what you pay determines the quality of the care you get – How much will you need for Health Care? How much will you need to pay for children's education? Or contribute to your church? $5,000 a month? $10,000 a month? Write it down on a piece of paper in front you – just for you to look at. Next to it write down how much cash you will need when you retire. <Next slide>
- Now look at the numbers you wrote down. How long will it take you to save that $4,000,000? <click> Well, here is a little calculation to give you an idea. If you need$4Million when you retire. . . .and have already saved $2Million – leaving you with $2M more to go. . . And you save $5,000/year . . . . <click> Assuming the conservative amount of 4% annual rate of return – then you will need: 72 years. Change the amount, change the savings, change the rate of return – make it 4.5%- 5% -6%. Maybe with lots of hard work and consistently excellent returns and hiding away every bit of loose change you have – you will get that 72 down to 50 years? <Click>
- And what’s more – you don’t want to just retire do you? Sitting playing board game and drinking mint julips? You have dreams and plans – right? You want to travel? Where? You want to experience new things? You want to send your kids or grandkids to college? (How much does 4 years at Standford cost?) You don’t want money. You want to LIVE – and no matter how much the self-help book might try to convince us otherwise – it does take money to live. Doesn’t it? So what is the solution?
- How many people here want to work for 50 more years?? How many people here CAN work for 50 more years??? I can’t. I needed another solution. <click> I needed a solution which was <click>Safe. Simple. And Smart. <click>Safe: Because I could not afford to lose what money I have. <click>Simple: Because fancy made up financial tools even bankers can’t explain doesn’t work for me <click>And Smart: Because I believe than if there is a real system and proven trends – then there will be results. And that is why I am here today.
- I found a solution – called GreenDeed – <click> which is a time-tested proven strategy that will allow you to do just like my family did – <click> reposition your underperforming assets in a way that will allow you to <click> achieve your goals. <click> Let me explain:
- Most people answer this question like this <click> Look, they’re jumping for joy! (ask questions – “How many of you would agree with this?”) But let’s look at the purchase of the house closer – from an investment perspective --
- Thirty years ago you could have purchased a nice home in Silicon Valley or Orange County you could have purchased a home for about $60K. What do you think these homes sell for today, older neighborhood three bedroom, one and one half bath? WAIT FOR THEIR ANSWER OR ENCOURAGE THEM FOR AN ANSWER. ENGAGE YOUR CLIENT(S). Get them talking.
- At the same time you bought that house in San Jose /Orange County, farm land surrounding the developing area was selling for $12,000 and acre or less! Taking the same $60,000 you could have purchased 5 acres of the $12,000 per acre land. What do you think that land sells for today, if you can find it? S LET THEM GIVE YOU AN ANSWER!
- That is a huge return. Now we would be jumping for joy, Right?
- Isn’t that amazing? If you had bought the right land – wouldn’t that have been great? But guess what – it wouldn’t have mattered what land you purchased in Silicon Valley, In Orange County, in Santa Clara County – it wouldn’t have mattered where it was, what it looked like, what was growing on it, what roads it was next to. Every single square FOOT of that land was in the path of development. The metropolitan area was growing and due to some very definable variables and conditions – that land was going to grow in value. And it did. 30 years ago some people just saw land – and other people analysized the data and saw what that land was going to become.
- $12,000 an acre today and 30 years later $1-2 million dollars an acre. Would that work for you? $36,000 down today and in 30 years sell if for $6 million dollars an acre. Would that help you meet your financial goals? Is that a solution that would make the mission possible? Now you really want to know what this solution is don’t you?
- This is Land Banking. And it is a strategy. A strategy to build wealth. <click>According to “the Land Banking Institute” Land Banking is the truly American-path to wealth. <click> From George Washington to Donald Trump – America’s fortunes have been build through land. George Washington leveraged his status as one of the largest land owners in the American colonies to finance the War of Independence. The railroad barron’s of the 18 th century – like JJ Hill or Carnegie – did they make money from the railroad? Sure – but they made their fortunes and established their legacy's on the land the railroad was built, and every stop, and every town, and every store. <click> Donald Trump continues to leverage land banking to finance his own little “war against good taste and decency.” {smile} <Click>The largest land banker is the federal government, and states. Environmental groups hold land to accomplish their goals Trusts and Pension Funds hold land to offset the volitability in the market Huge retails bank land to finance future growth the development And builders and developers hold land waiting for the development of an urban area to grow. This is Land Banking.
- Land Banking is a strategy – it is not gambling or speculation. This is not fancy derivatives or Hedge funds developed by some wall street wizard. The Land Banking Institute defines land banking as purchasing select pre-developed land and holding it until developers want it. Make sense? Simple huh? Let me show you why it works.
- According to the county tax assessor, over time the assessed value of land increases and a greater rate than the value of the structure. That is one of the reasons that after an area becomes mature you see home purchased in older neighborhoods, the house is demolished and replaced with a new home. Where is the value? <wait for the answer> The value is in the land! The house is just labor and materials. Can you imagine yourself profiting from the rising value of pre-developed land? Yes This is what Land Banking is all about!
- Review slide slowly…For our discussion we break land into three types Undeveloped Developed and then back to Predeveloped Predeveloped land is land that has not yet developed, but has been designated for future growth.
- Keynote: What causes land value in an area to increase? There are five key elements that impact land value appreciation. Population density , not just population alone. This is common sense. The population Growth Path determines where to buy. But, population growth must be support by a abundant jobs created by a diverse economy. And we need to see affordable homes and the infrastructure to support the growth. And last there absolutely must be a demand for affordable housing.
- Review Slide When all 10 indicators are present the Land Banking Institute calls this area a Land Banking “Hot Spot.”
- Let’s make sure you understand the proven land banking formula: Find a “Hot Spot” Growth path of a major metropolitan area All 10 indicators including diversified economy, jobs, and affordable housing The availability of affordable housing or half-priced homes is critical. When people can’t afford to buy a home within the population center, where do they go? To the outskirts where housing is more affordable, right? That is what propels the sprawl – or as we like to call it “The Path of Development” Select Pre-developed Land Not raw unused land Not land with development already on it Pre-developed land Purchasing the pre-developed land in a “hot spot” Hold it until value matures and the developers want it. That is it. A Safe, Simple and Smart formula. That is the Land Banking formula used by GreenDeed. See why I get so excited?
- California is a rapidly growing state with less and less available space. There is 82% of lands designated as wild land, leaving only 18% of the land available for development, with 10% already developed. Land Bankers who are in the know realize this is a good thing. Continued expansion of the state and a limited supply of available land means price increases reminiscent of Santa Clara County or Orange County 30 years ago are still possible today.
- Where is the largest population? We live in the state with largest population, 38 million people (as of 1/01/2009 per CA Department of Finance). 21% of the US’s population growth since the 2000 census was in California, which will grow an additional 6 Million in the next 10 years. If California were a nation today, it would be the 8 th most powerful economic nation (as of 2006) in the world - beat by Japan, Germany, The UK, France, Italy, and China. However, we must look at population density. You can not just go anywhere in the state and make a Land Banking purchase. There are 2 major population areas in California. The San Francisco Bay Area with 7.7 million people. And in Southern California there is an area called the 60 mile circle with one half the population in the state and 3.6 times the density of the San Francisco Bay Area. Punch Line: Where would you look to find a Land Banking purchase, the SFBA or the 60-mile circle? Transition: Let’s look into the 60-mile circle.
- GreenDeed has four unique packages to be matched to your unique needs, goals and timeline. The first is “The Pathfinder” The path finder is a pension rescue plan. How many people have had to cringe when you opened your retirement savings – and are looking for a way to get back on track? This is the GreenDeed package for you. Let’s look at the details of a real example: <next slide>
- Review Slide
- The second GreenDeed solution is “The Accelerator ” The “accelerator” is a college savings plan. How many of you have the prospect of paying for a child’s or grandchild’s college education on the horizon? Let’s look at the details of a real example of the GreenDeed’s “Accelerator”: <next slide>
- Review Slide
- The third GreenDeed solution is “The Provider” The provider is a retirement income plan. Many of us invest in Life Insurance – but for life insurance to work in providing Let’s look at the details of a real example: <next slide>
- Review Slide
- The forth solution is “The Legacy” How many people here would like to leave something meaningful – an investment into the future? The legacy is an opportunity for you to leave something behind. To your college, church, the opera, -- or your grandchildren. retirement income plan. Let’s look at the details of a real example: <next slide>
- Review Slide
- There are various ways to purchase a GreenDeed, but borrowing money isn’t one of them. Each is unique to you. CASH – in the bank, in the mattress, in the form of an annuity liquidation from your insurance or lottery winnings, perhaps an inheritance? SETTING UP A SELF-DIRECTED IRA – with existing or new retirement funds. Over 70% of GreenDeed parcels are purchased by individuals Self-Directed IRAs ROLLOVERS – We will help you in every step of a rollover to keep it simple and make it easy to move your funds into a self-directed account that will allow you to designate land as part of your funds portfolio 1031 EXCHANGES – The ultimate in tax reduction, Land Banking is very adaptable to 1031 exchanges GreenDeed transaction experts and ACE Capital Group partners have worked with investors just like you to free up your underperforming assets and get them working for you.
- <click> Remember how long it would take you to save enough money to retire? <click> It is all about the return you get. <click> <click> Remember the earlier example where land in nearby Silicon Valley and Orange County had an 18% return or more over the past 30 years….<click>the choice even becomes clearer when you have the potential to reap 20%, 30% and even 40% annual returns with land banking.”
- You can start to seize the land banking opportunity today. Do you want to be able to retire in less than 50 years? Do you need an opportunity to take control of your financial future? Do you believe that land is a source of tremendous wealth? Do you believe that land banking – the strategy of buying land in the path of development is simple, safe and smart? Do you believe that the tremendous growth the Los Angeles county will continue? Do you believe that land purchased today in the path of Los Angeles county will increase in value? <pause, take a breath, and be more introspective> Raise your hand if you a pension that needs to recover, a college tuition that will need to be paid, a retirement fund that needs to grow or a legacy they would like to leave? <raise your hand> And keep you hand raised if you currently have underperforming retirement funds that you would like to get to work for you? <keep your hand raised> <pause> I was just like you. My hand was raised. I scheduled an appointment with a GreenDeed representative and became a land banking. Today – I would like to be the one to schedule an appointment with each of you -- so that you can too. My assistant is handing out an appointment card to all of the raised hands right now.