Dirt Cheap Land: Then and Now

The United States has a rich history of property purchases involving dirt cheap land for development and conservation purposes.

Photo: Kitchen

Real estate investors, government agencies and corporations should appreciate this history before pursuing dirt cheap land for sale.  

Interested Parties in Dirt Cheap Land

The primary buyers of dirt cheap land in the United States are land speculators and “flippers” hoping to gobble up valuable property.  The reasons for depressed land values may involve non-property issues like legal and financial problems for past owners.  A successful “flipper” will acquire dirt cheap land at a fraction of its value and sell it to land developers, governments and individual buyers at a substantial markup.

Corporations looking to expand production and storage facilities are also in the market for dirt cheap land.  For example, a commercial printing company with considerable financial resources can afford to renovate dirt cheap land to make it usable for a new distribution center.  A corporation may purchase several adjacent lots to their original purchase in anticipation of future expansion.  

Local, state and federal agencies have also been active in acquiring dirt cheap land for sale around the United States.  These properties can be used for municipal waste facilities, truck depots and remote offices at a fraction of the cost to taxpayers.  Property owners selling empty plots at dirt cheap prices prefer to sell to government agencies due to their reliable financial resources.  

Oil, natural gas, and water companies are active in purchasing direct cheap land for prospecting purposes.  This type of transaction is common when dirt cheap land is located near areas where fresh water, oil and other natural resources have been cultivated in the past.  While these land purchases may not produce a single drop of water or oil, the upside for the buyer is millions of dollars in profit with a single strike of a drill.

The Louisiana Purchase

The Louisiana Purchase was consummated between France and the United States on May 2, 19803.  The United States acquired what was known as the Louisiana Territory from Napoleon Bonaparte for $11 million in gold and $4 million in forgiven debt.  Bonaparte wanted to unload the remainder of its continental American holdings as a strategic measure against Great Britain as well as a practical measure for an aspiring European power.  The $15 million price tag was a steal for President Thomas Jefferson and Congress even in the early 19th century.  

The Louisiana Territory covered much of the Great Plains as far west as northeastern New Mexico up through Montana and Minnesota.  This large expanse of land would prove to be an economic engine for the United States for the next two centuries as the breadbasket of America.  The opening of the Louisiana Territory for exploration in the mid-19th century encouraged settlement in Middle America and expansion to the Pacific.  The economic benefits of the Louisiana Purchase for the United States are nearly incalculable compared to the mere pittance paid for this dirt cheap land.  

The Gadsden Purchase and Transcontinental Railroad

The Gadsden Purchase of 1853 may have been a relatively minor land deal but it opened up the American Southwest for a transcontinental railroad.  This purchase sent $5 million to Mexico in exchange for parts of New Mexico and Arizona, extending America’s influence in former Mexican territories.  This small investment in dirt cheap land would yield millions of dollars for land owners and railroad developers throughout the United States.  

Congress was lobbied by a group called “The Big Four” including California Governor Leland Stanford and businessmen Mark Hopkins, Charles Crocker and Collis Huntington for a transcontinental railroad.  “The Big Four” made an investment of $1,500 each in the Union Pacific and Central Pacific Railroads in the hopes of a railroad that would span most of the continental United States.  Even though the property obtain through the Gadsden Purchase was undeveloped until later, the assurance that a southern route was possible proved the final hurdle to development of the railroad.

Stanford, Hopkins, Crocker, Huntington and other businessmen profited greatly from land concessions by the federal government.  Congress subsidized land and railroad development between $16,000 and $48,000 per mile depending on the terrain.  The Central Pacific laid 690 miles of rail and the Union Pacific laid 1,087 miles of rail, earning at least $28 million for investors in both railroads.  

The Plum Creek Conservation Deal

The Plum Creek Timber Company and the Trust for Public Lands completed a $510 million land deal in May 2009 to preserve Montana woodlands.  The Trust for Public Lands along with conservation groups like The Nature Conservancy worked with the state government to prevent real estate development of 320,000 acres of forest near Plum Creek.  The $510 million deal will be completed by 2012 with the help of federal grants, state funds and private donations.  

The Plum Creek Conservation Deal is remarkable because it preserves the priceless natural resources of Montana.  Real estate developers earned $330 million in revenues on existing Plum Creek developments since 2004 with the promise of millions more with additional developments.  While the deal may not produce great economic returns for conservationists, the Plum Creek Conservation Deal keeps pristine forests from development until the distant future.  

Online Resources for Dirt Cheap Land

Your search for dirt cheap land for sale should start with state-specific websites like Colorado Land Cheap© and SunsitesLandRush.com™.  Colorado Land Cheap© (http://www.coloradolandcheap.com) is a great resource for investors and speculators looking for property in Colorado.  This website updates daily with property listings as well as real estate news for Colorado residents.  SunsitesLandRush.com™ is another resource for dirt cheap land available to investors looking to enter the Arizona property market.  

After exhausting local and regional resources, your search for dirt cheap land should continue with national websites like Foreclosure.com™ (http://www.foreclosure.com).  This website is the result of a record number of housing foreclosures in Florida, Nevada, California and other high-demand markets in recent years.  Foreclosure.com™ lists dirt cheap land for sale by distressed owners who are looking to salvage whatever value possible from their investments.  Users can click on individual states or use criteria like maximum sale prices to find dirt cheap land on Foreclosure.com™.  

If you are looking at homes and land overseas, Holprop.com™ (http://www.holprop.com) is a great source for dirt cheap land listings.  Holprop.com™ lists featured properties in Asia, Australia, Europe and North America on its main page to entice motivated buyers.  The simple search tool and extensive listings on Holprop.com™ can start you on the way to a famous land deal for your portfolio.