A Guide For First-Time Investors

Anita Verma-Lallian is the founder of Camelback Productions and a real estate developer and CEO/founder of Arizona Land Consulting.

Investing in land development can be a great opportunity for those seeking to maximize their financial capital. While it may initially seem intimidating, this venture allows investors to tap into a market with significant potential for large returns. With careful research and strategic planning, land investment can lead to impressive profits and long-term financial growth.

As an experienced investor who has been well-immersed in the field from a young age, I have established my consultancy business as a leader in the industry. This year, our firm made history after selling a piece of land we acquired in 2022 and achieving a 240% return on our investment in just two years. I think deals of this magnitude are the future of land development, and now is the perfect time to break into the industry.

Here are some essential tips and lessons for first-time land investors:

Consider property type, location and growth potential.

Identify which type of property you are interested in investing in and the location while taking into consideration areas with the highest growth potential.

Analyze different asset classes, including office buildings, multi-family units, industrial land, retail space, hotels and hospitality, mixed-use or special purpose. Each of these categories involves specific stipulations that investors need to be aware of before investing.

While deciding which investment to make, it is important to simultaneously consider the market in which the investment would best flourish. For example, Arizona, Texas and Florida are among the markets experiencing the highest growth in recent years. I recommend identifying areas that are less developed and have a clear path to growth.

Ensure that the investment price and interest rates are sound.

It is crucial to study the market to avoid overpaying for a property, both as it relates to the buying price and the interest rate. You can mitigate risks by understanding the area and what the land is trading for. Always stay informed about market rates.

Study the piece of land thoroughly to ensure growth opportunities.

As an investor, it is important to examine the growth potential of an area extensively without leaving any stone unturned.

• Be thorough with your research, conducting extensive analysis of the property and its surrounding areas to identify available land and ongoing developments. Stay up to date on upcoming projects and developments in the area, as these can significantly influence property values.

• Assess the existing infrastructure to decide if it can support future growth and that it can support development in the short term. For example, we were able to acquire a piece of land due to the lack of water the land had to sustain the residential community that was originally intended to be developed. We sold it to a firm with plans to build a data center instead since it doesn’t require the same amount of infrastructure the residential community needed. This deal showcases the importance of doing your research on crucial aspects of the land, like infrastructure, before making the decision to invest.

• Ensure that there are no red flags, including environmental issues with the property, restrictions on what you can develop or difficulties with the title.

• Additionally, you want to make sure that your intended zoning aligns with current regulations. Explore the ability to rezone if needed.

Risks are often worth the reward.

As many people know, investing is the business of wrangling risks. More often than not, to get a good property, you have to move quickly, so familiarity with the land can put you ahead of competitors.

This has been the biggest lesson in my career—make sure you possess knowledge of the area you’re investing in so you can look at an opportunity and see if it makes sense and know when to take the chance.

Always remember that in this industry, relationships are crucial to your success.

Building good relationships with people is a skill that we often learn is important in every facet of our lives. This is especially true as you break into the land development industry.

Ensure you build quality relationships with everyone you cross paths with—especially the city council, economic development team and the city planner. Leaving a lasting positive impression on these teams within a city you want to develop in can contribute immensely to your success.

Take in as much information as you can.

Frankly, the majority of my advice falls under research. This umbrella term includes every responsibility investors have from the beginning of their investment to the end. Conducting thorough research, from understanding the external market to the infrastructure of the specific piece of land you’re interested in—every piece of information is crucial to maximizing your investment.

Talk to as many people as you can, study growth patterns, pay attention to relevant projects, position yourself next to existing projects, see where growth is coming from, and see which areas will achieve appreciation over time.

I also advise investors to stay informed by reading trades in the market you’re in, as well as news in cities you’re investing in and staying on top of commercial real estate trends. Having a well-balanced diet of information will contribute to the growth of your investments and your long-term success.

The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

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