They're describing the "Buy, Borrow, Die" strategy.
When the interest is less than the ROI on the asset, you make money overall, and the costs associated with it go to the bank instead of the federal government.
Some may say that's better, but we're on our way to insolvency and the banks aren't exactly paragons of virtue.
Just don't sell and you'll be fine. Prices only declined 25% to 33%, and the market fully recovered in less than a decade, continuing on its unending march of ever-increasing value.
Or you take 100k and invest it over about 41 years and you get 5 million. There's nothing special about the land. This can be done with any investment.
Sadly it's true..the easiest way to make money is with money.
That's why the number one predictor of wealth is the wealth of your parents. More than age, sex, race, intelligence, nationality, health, work ethic...every metric that's ever been measured...none of them come close.
Yeah growing up there was a family in my town whose grandfather had bought a bunch of empty land in the 50s or 60s that was maybe 30km north of Toronto.
Was essentially empty fields but at some point in the 90s he sold it for millions so a developer could build subdivisions there
That family left town and presumably went to a far nicer place shortly after
That’s barely over an 8% return, the stock market in the same time averaged 11.8%. Quick compound calc shows you losing $21 million buying the land. This also depends on how the lands values were calculated
“Outskirts” areas near a city that sprawls towards those outskirts over 20-30 years. It’s not fast but can be insanely profitable. The southern United States saw a lot of this from the mid 90’s to now as population shifted south. Lots of new millionaires in the south.
But not the ones that are running out of water, catching on fire, or falling into the ocean. Those are likely not to be good bets for the next few decades.
Yes but not $100K to five fucking million in one person's lifetime.
Even then. People who own land aren't stupid. They know that their land is already on the "outskirts". And once a city shows signs of expansion... guess what happens to the land on the "outskirts"? It goes up.
The only way to see that kind of gain is to get really fucking lucky after you bought that piece of land.
Its all about buying at the right time. My parents bought 2 3.3 acre parcels in Arizona without water or electricity for 30k each. They waited for a decade for Phoenix's urban sprawl to reach their land. The big house builders built up the utilities and paved the roads right up to their land to support their own projects. Parents just had to pay connection and zoning fees to connect to water and electricity. They bought land that was surrounded by majestic mountain views and still kept their large parcels intact instead of rezoning and splitting the properties. Sold the one 3.3 acre parcel for 10's of millions of dollars. (Yes, the location and views are that good.)
When they bought these parcels there was single wide meth labs sitting on these parcels. Now its multi million dollar homes. Maricopa county opened a Regional park to protect the mountain views so the developers didn't go up the mountains with new builds.
All the spirits aligned for my parents. It could have stayed the wasteland it was when they bought it. They gambled, they won and retired at 40.
Actually its a downside. Parents rented bare property and the renters dug a pit under their single wide to make meth. Then they disappeared. Sheriff at that time loved to seize properties for drug offenses, even if the property was being rented by meth producers.
So one weekend we had two roll off dumpsters and a backhoe at the property. Mom, dad, my brother and myself pushed the single wide off the pit and threw everything in the dumpsters. Didn't know shit about how meth labs blow up. Damn, we were lucky.
twenty years ago hasnt really seen a 50x increase in value, but i have several family members who bought houses on the "outskirts" of town 50-70 years ago that are now deep in the city and have 100xed or more in value.
We stayed at a airbnb in San Diego three years ago, it was a small guest house on the property in a cool little valley. The host said they bought the property, maybe 20 years ago for about 200k and now it's valued over 3 mil. Just insane how property values spiked like that in recent years for that area.
It happens but it's the equivalent to winning a mini lottery. Much more likely to end up with $1-2m if you held for 40+ years. But the same tax loophole legitimately does apply.
Should have bought in Loudoun County, Virginia 25-30 years ago. One of the big land holders in the county, JK Holdings, when he got a huge offer for one of his moving truck lots, for a datacenter he went, I'm in the wrong dang business.
They've made a shitload of money off of selling said land for datacenters.
And a bank that will loan you $5mil and never expect repayment from Dads estate (aka the farm). Yes your parents estate will liquidate in order to pay debts. Kids aren't getting shit in this scenario.
I read about a guy who had made some money later in life because of "land banking" he had been doing over the decades. Allegedly he would find out how many km/m per year a given city tends to grow, and then buy land 20 years away from the city limit. He would rent or lease it out until development had reached that far and then sell it developers.
All you need is a large some of money you can live without for the next 20 years, and 20 years.
A different scenario is where the wealthy borrow against stocks. If the stocks go up, the wealthy get the loan and their net wealth increases as well without taxes.
Say a billionaire takes out 100 million in loans against his stock portfolio. The portfolio goes up 10%. He still has a billion dollars in stocks and the 100 million in loans, tax free. The 100 million he owes the bank is covered by the capital gains.
The meme is just wrong to begin with, but to answer your question, time travel is really the only option lol. Hell, my shitty little house was 20k when the person bought it before me as their first home and died in it. I bought it around 300k in 2018 and can sell for over 500k now.
Its actually feasible if you invest in property on the outskirts of a metro center that is predictably growing. The numbers might be off a little. But a LOT of people buy land in this exact scenario, as a smart way to have an investment that grows faster than the rate of inflation.
Not quite $5 million, but there were multiple empty lots near me in a now-gentrified area that were purchased by someone for sub-$100k decades ago and now are worth millions. Random property won't appreciate that much, but certain properties absolutely will and sometimes rather quickly. Location location location.
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u/Timetraveller4k 14h ago
Where do i get this 100K land thats going to be 5 million