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Meza: Hey guys thanks for joining us. Today we are going to be talking about the 7 remarkable features of land but before we get started I would like to introduce myself. My name is Christopher Meza and this is my team mate Jinesh Mehta.
Mehta: Hi how are you.
Meza: And we are going to go ahead and get started. So the 7 remarkable features of land number one is scarcity.
Mehta: Absolutely and a great example would be California land. There is actually only 2% of California land that remains to be developed.
Meza: Very true. Buy land they're not making it anymore. Number two land is fundamental. The long term trend of real estate is that it is always rising and that's because of several different factors. Why don't you go ahead and share some of the factors.
Mehta: Of course, one of those factors would be the limited supply of the land, there is also the increasing demand for it. Inflation, costs of labor, materials, financing, legal fees, and development regulations.
Meza: Number three is land provides an arbitrage opportunity. Arbitrage very simply is when you have a very willing buyer and an unwilling seller. Why don't you go ahead and talk about that a little bit Jinesh.
Mehta: Of course, I remember when a Costco moved into an area and created a lot of traffic and attracted a lot of major developers. As a result, McDonald's wanted to locate themselves directly across the street from the Costco but the owner of the land was unwilling to sell it to them at the time. Because McDonald's understood the unique value of that location, in the end they ended up knocking on the door of that land owner and said you know what, why don't you name your price.
Meza: Absolutely and that's just something that cannot happen when it comes to stocks or other types of different investments because if I have one hundred shares of IBM and you have 100 shares of IBM what's unique about mine? Nothing. It's the same, right?
Meza: So that's the whole point here. That you have an arbitrage opportunity, because there are no two pieces of real estate that are alike, there are no two buyers that are the same. Number four is control but before we get into it I have to first define what an investor is and what a speculator is. An investor is someone that is concerned with how an asset will perform over time while a speculator is concerned with the up and down price movement in the short term. For example, when Enron started to crash there are certain speculators that came in and said, hey I can buy it right now while it's affordable and it'll go back up and I'll make a lot of money quickly. But what ended up happening? Enron collapse and went bankrupt, it went to zero. That simply cannot happen with land it just can't disappear.
Mehta: And because the supply of the land is diminishing while the demand for the land is growing, the value of the land goes up. And this provides valuable protection against inflation.
Mehta: Yes. And land unlike any other real estate has zero terminal failure.
Meza: If you have a home that's one hundred years old sure there are some that will be very valuable, but for the most part, many of the homes will have functional obsolescence problems. For example, there's not enough bathrooms in the home, maybe the closets are too small. The point is that over time these buildings and structures get old. They become obsolete and that just doesn't affect the land.
Mehta: And you have you to remember acts of nature. An earthquake will naturally happen and devastate a home but that same earthquake will have no impact on the land.
Meza: Same thing with tornadoes and hurricanes, right?
Meza: So number six is ease of investment. There are several different types of real estate investment strategies from buying hotels which is very expensive to get into to even buying a home which could be difficult because of the financing. But here what we're talking about is buying the land which is very very easy. Why don't you share some different ways that you can buy land.
Mehta: Of course. There are several easy ways to buy land, the first is an all cash payment, you can even do roll over from a 401 into a self directed 401. You can also take advantage of our in house financing. Or you can syndicate with partners if you would like to go in with other people. More importantly you can use any combination of these four strategies to acquire land.
Meza: Absolutely, I want to go ahead and explain the 401k a little more in depth. When I use to work for Boeing I had a 401k and I rolled the 401k over into a self directed 401k while I was still employed. And from that self directed 401k I was able to buy land and several other things that just weren't available to me in the Boeing 401k and I did this with no tax consequences or tax penalties. Because I didn't take the money out, I rolled it over.
Mehta: Wow Chris that's amazing.
Meza: Absolutely. So let's move on to number seven. Number seven is legacy and pride of ownership.
Mehta: Yes, land will continue to hold value and create wealth for future generations.
Meza: Who doesn't want to buy something that they can give to their kids that will continue to increase, continue to provide benefits for generations to come. Thank you to everyone here for watching I really appreciate you tuning in to find out the seven remarkable strategies of land. If you guys haven't had an opportunity, please pick up my best seller Successonomics. I really love this book, I'm really proud of it and before we go. Jinesh why don't you tell everyone that is listening or watching in how they can get a hold of us.
Mehta: To learn more you can go to our homepage www.rtaland.com and you can also sign up for our newsletter that will keep you up to date for free.
Meza: I look forward to hearing from you guys soon. I hope you guys enjoyed the video.
Mehta: Take care.