Land banking is the process of buying land inexpensively that is strategically placed in the path of growth and then holding it for a period of seven to ten years until it is sold to a developer at a higher price. The speaker, Brad Warren, who is a certified teacher and a real estate coach, advises that it is important to distinguish land banking from land speculation. Land speculation is simply buying land in the hope that its value will appreciate. However, land banking involves buying land in areas experiencing tremendous growth on the periphery, not in the downtown areas. Warren’s company researches the areas they invest in and buy land ranging from one acre up to 30, 40, 50, 60, or 100 acres.

The land acquired is within a 60-mile radius of downtown Los Angeles, and the company buys the land for the investors. The minimum investment is $25,000, and investors can acquire green energy real estate that is likely to go to an energy company to build a solar farm. Warren explains that his company has a full research and acquisition team that researches all the projects in the area and attends city council meetings to hear about upcoming developments. Once they identify an area with a potential project, they buy the land of whatever size and sell it to investors.

Warren’s company ensures risk mitigation by having a 16-point comprehensive analysis checklist. Every piece of property they consider buying has to meet 16 criteria or they reject it. They buy only one out of every 30 properties they look at, and they ensure that their investors hold onto the land for seven to ten years to get returns of three to seven times their investment. Warren advises investors who want to do due diligence to visit the area to verify its potential. However, he notes that the company’s team knows the area well, and they even get called by the city and county of Los Angeles when there is a land use issue.

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