A Holding Company for Land

I’ve always considered land to be an interesting investment. There’s only so much land in the world, and the scarcity around it creates value. Land is also something that people need. There’s huge demand for it. That demand plus scarcity creates an asset that I believe will always trade up over a long period of time. With that in mind, the question is, how do I get as much land as possible?

I’ve often had the idea of creating a holding company for land. I would probably call it The CWT Land Company as all the companies I have created, minus one, has had the CWT name attached to it (I’m not very creative with names). This is not a revolutionary idea. Other land holding companies exist. Many of these companies are also publicly traded as well. Even with the idea not being revolutionary, I believe that it is a great one. Here’s how it works:

Step one is obviously taking out a loan and buying land. The important thing is that that land produces revenue. What I have seen most land holding companies do to achieve this is buying farmland. They can make money off of the land by leasing the land out to farmers. That’s a good way to do it, but it isn’t the only way. One could also do camper and boat storage on the land. They could also lease it out to cell phone towers. The genius part is that it doesn’t even have to make a profit. It just has to cover the expenses of owning the land and the payments on the land. That way the land is being paid for by the revenue from the land.

Step two is getting more land. One could take out a loan on the land that they own and buy more land with it. Then they would have to set something up on that land to produce revenue to pay for the new piece of land as well. I would like to do this until I could buy a piece of land big enough to create a campground as that would pay for the land and probably be pretty profitable as well.

Step three is getting investors. Once one has enough land under the company, they can sell shares of the business to investors. They can then use that money to buy even more land! The part of this step I find interesting is the premium one can raise money at for this. I’m curious to find the number out for this. One would need to raise money at a valuation higher than the value of the land that they own, and they could do this through the revenue the land is producing.

Step four is similar to step three. Step four is taking the company public. This would be a good idea as one could raise a lot more money and start growing very quickly. It would also give me the ability to get liquidity without selling the land. I could sell part of the shares in the business without the business having to sell any land.

This is an idea that I very much would like to do. I would love to take a land holding company public under the CWT name.

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