Cape Coral Landplots, Florida
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Cape Coral Landplots, Florida

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Learn about the benefits of investing in Florida land, and why we think now is an ideal time to take a closer look at the Cape Coral market on the south west coast.

Learn about the benefits of investing in Florida land, and why we think now is an ideal time to take a closer look at the Cape Coral market on the south west coast.

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  • 1. Cape coral florida Landplots
  • 2. Executive Summary • Range of exclusive, discounted, serviced and buildable land plots starting from $15,900 • Full planning permissions are in place with all plots located in prime residential areas • Mixture of dry, canal and waterfront lots all ranging from 10,000 – 15,000 sq ft • All plots are fully vetted and sourced directly from lenders and bulk sellers • Negligible closing and running costs with a clearly defined exit strategy in place • Land prices are experiencing double digit growth across Florida and wider US market • The average price of a Cape Coral property is $284,239 (13% increase year on year) • Cape Coral is a young, wealthy, fast growing city with a great quality of life • This is an excellent investment to protect and grow your wealth ME W EL CO OF TO THE CITY CAPE CORAL
  • 3. The Florida Crash & Recovery (2006-2013) Anybody even remotely involved in the Florida real estate market would have noticed huge changes during the last 6 years. Back in 2007-2008, the entire Florida property market was at rock bottom, the inventory of unsold homes was at record highs, bank financing had evaporated and cash buyers were relatively thin on the ground. Fast forward to mid-2010 and keen observers would have noticed that the market was changing in several very important ways. There was a shift in the prices of foreclosures, an increase in the number of competing bidders and most importantly, a surge in new construction projects. In parallel to that, distressed developers started getting better finance terms from their banks, big private equity and investment funds entered the market and the volumes of sales transactions increased dramatically. Throughout 2012 and into 2013, the recovery in the Florida real estate market became very well established and major publications such as The Economist, BBC, CNN, The Wall Street Journal and many others published articles highlighting a remarkable turnaround. Average prices for all property types have now increased across the Sunshine State for 17 months in a row. For all of these reasons and more, now is a great time to invest in Florida. Prices are increasing but still way below their peaks, resale inventory is very low but new construction is increasing rapidly. On top of that, bank financing is available, the big builders are back, owner occupiers are competing with investors, rental demand remains high and the economy continues its strong recovery. surge in new construction “ “ 2013 has seen a
  • 4. the importance of growing your wealth We know that most buyers are very conservative and protective of their hard earned salaries. However cash on its own is rarely sufficient enough to cover large expenses such as children´s educations, second homes, major medical expenses and retirement. Whether your salary is modest or very high, we all have to invest in growth assets in order to maintain our lifestyle and protect our wealth. The truth is that cash is a terrible store of wealth because it continuously loses value though the insidious effects of inflation. While many people understandably have a low tolerance of risk after the turbulence of the past 6 years, letting your cash sit idly in a low interest bank account can be the financial equivalent of the frog in a pot of slow boiling water. For that reason, investing your cash so it can grow over time is one of the most important activities you can put your mind to at any stage in life. It can have a tremendous impact on your quality of life and future happiness. The key to success is to have a diverse range of investments and real estate assets have an important part to play. While we have enjoyed considerable success in identifying and selling income generating properties, we know many buyers who do not want the “hassle” of owning tenanted property but do want to enjoy the “value storage” and capital appreciation benefits of real estate investment. With low entry levels, high profit potential and negligible running costs, land investment is one of the most appealing options available to today´s buyers. store of wealth “ “ Cash is a terrible
  • 5. why invest in land? Five years ago, when Florida property prices were collapsing, smart and experienced investors started buying residential land plots at 10% of their former values. These were patient people who knew full well that the foreclosed deals would eventually dry up, that builders would eventually start building again and house prices would start increasing. Cape Coral is one of the most highly sought after and desirable cities in Florida with a very fast growing population. At the peak of the property boom in 2006, regular 10,000 sq ft landplots in Cape Coral Florida were selling for well over $100,000, with prime water front lots selling for many times that amount. Torcana have sourced fully serviced landplots in these same wealthy neighborhoods for less than $20,000. The key to maximising capital appreciation is to identify opportunities in popular residential areas and know where demand is pushing the direction of infrastructure, commercial activity and population growth. One of the main benefits of investing in land plots now is that you gain from future price appreciation without the perceived hassle of dealing with a completed house and tenants. Through rigorous research we have identified these pockets of growth and we are offering clients the opportunity of securing prime landplots at 15-20% of 2006 prices in a recovering market. Land prices are barely 10% of the house prices in the locations we are focused on, far below the traditional 20%/80% split. As lost value is regained, we suspect that in 3 to 5 years you will look at what you paid for these plots with delight. With a market undersupply, new home construction springing back into life, and 18 months of house price increases, it is only a matter of time before the prices of land plots revert back to their historical average values. All of the land plots that we are marketing are in wealthy neighborhoods with full planning permission for residential single family homes. All assets, including serviced land, go through cycles of price inflation and deflation. Identifying the downturn in prices, using land as store of value and selling at a profit during an inflationary period is what land investors do. “ the key is to identify the direction of future population growth “ Land is usually the single biggest cost in building a home and in Florida it is generally accepted to be 20% of the project cost. For example, if the average price of a home is $250,000, it would be reasonable to assume that the serviced land plot value would be in the region of $50,000.
  • 6. about Cape Coral Like many Florida cities, Cape Coral was founded by visionary property developers. Back in 1957, brothers Leonard and Jack Rosen (Gulf American Co) purchased and developed a 103 square mile masterplanned waterfront community. While Cape Coral started out as a gulf coast retirement community, during the 1990s it moulded into a vibrant economic hub of South West Florida. Fully 85% of the population is now under the age of 65 and the median age is just 38.6. The Rosen brothers converted this Florida swampland into a tropical paradise by digging hundreds of canals, paving miles of road and constructing several major bridges. Property development continued through the early 1960s and Cape Coral City was officially incorporated in August 1970. The city is located 2 hours south of Tampa Bay (population 4 million) and 2 hours west of Miami (population 5 million). It boasts a wonderful infrastructure and the nearby Southwest Florida International Airport serves over 8 million passengers a year. Cape Coral and Fort Myers are considered a single metropolitan area with a population of over one million people connected across the Caloosahatchee River by two main bridges. The Cape Coral population has been growing at a rate of nearly 7 percent per year - the current population of 157,000 has more than doubled since 2000 making it the fourth fastest growing city in the United States among cities with populations more than 100,000. It is predicted that the Cape’s population will be 180,000 by 2015 and will peak at 400,000 when all remaining residential space has been constructed. Cape Coral is a wealthy, low crime city with a great quality of life and economic opportunities. It is home to more than 8,000 rapidly expanding business clusters and a well-educated labour force with a median household income of $55,484. Average sales prices in Cape Coral have been increasing every quarter since the beginning of 2011. It also recently topped the list of best performing cities nationwide (measured by asking price increases) in a recent survey by the Associated Press and Trulia. Cape Coral Population Growth (Official Census) 1970............................................. 11,470 . 1980............................................. 32,103 1990............................................. 74,991 2000............................................. 102,286 2010.............................................. 154,305 Location: Adjacent to Fort Myers in the Florida Gulf Coast Area: Cape Coral is a 120 square mile peninsula Climate: Experiences 355 days of sunshine per year. Average temperatures range from 18-29C. Canals: 400 miles of canals, more than any other city in the world (including Venice, Italy).
  • 7. identifying the Best Land Plots It is essential to understand the dynamics of land values and the direction of population growth when choosing where to buy developed land in Cape Coral. The first areas of the city to be developed were the south west sectors of the city. As this area was completed in the 1990’s development moved north towards Pine Island Road. As the population continues to move north and west, it becomes apparent that the current wave of development is happening north of Pine Island Road and west of Old Burnt Store Road (see image opposite). This is where the money will be made over the next 5 years. It is important to note that the vast majority of lots east of Old Burnt Store Road do not command the same prices as those west of Old Burnt Store Rd due to a series of bridges preventing Gulf of Mexico access to boaters. Old Burnt Store Rd. Pine Island Rd. Earliest Development AT LEAST 80% BUILT OUT
  • 8. understanding Cape Coral’s Lot System Cape Coral is comprised of 400 miles of waterways – 220 miles of salt water canals which lead to the open gulf and 180 miles of fresh water canals which are connected to fresh water lakes. There are 3 main categories of land plot available in Cape Coral with prices varying widely depending on which category you purchase. 1 2 3 Sea Water Canal Lot Open Water Lot Vacant Dry Lot Dry lots (not directly facing water) are the most affordable type of plot and their price varies significantly depending on the location. The better ones recently sold for up to $95,000 each but can now be secured for much less. The majority of our dry lots cost less than $19,000 and are in prime locations west of Old Burnt Store Road. These lots are surrounded by million dollar waterfront homes and are fantastic areas to live in. Canal and lake facing lots are more expensive, with salt water views generally costing more than fresh water views. Plots that previously sold for over $200,000 and can now be purchased for as little as $50,000. Salt water lots with clear unobstructed access to the gulf (essential for sailing enthusiasts) are far more valuable and prestigious than those with a bridge blocking gulf access to all but the smallest boats. The most expensive lots are Corner lots with open salt water views, unobstructed gulf access and seawalls. Many of these prime “wet lots” are selling for over $200,000 today and would have fetched over $1 million during the boom years. In summary, the closer you are to open water with no bridges or other height restricting obstacles, the more sought after and expensive the lot will be.
  • 9. the Opportunity Torcana have secured a wide range of landplots in Cape Coral, most of which are located in a prime area west of Old Burnt Store Road in the north of the city. Our partners pay below market prices by dealing directly with lenders and volume sellers and all plots are fully vetted and buildable with no outstanding taxes or liens. The majority of lots available are priced under $20,000, the purchase cost is very simple (see page 13) and the running costs are as little as $250-300 per year. As long as these lots remain vacant, there is no need to file US tax returns. In other words, this is as “hassle free” as real estate investment gets. Cape Coral is a fast growing city in a great location. It is safe and affordable with a limited amount of space to build on. About 45% of the city’s residential lots are developed and the current Cape Coral population of 157,000 is expected to swell to 400,000 once all lots are completed. Rather than finding enough buyers, the focus for builders today is securing enough home sites. Lot prices are up by 50% in the last twelve months and builders such as DR Horton, GL Homes, Taylor Morrison and others are aggressively reinvesting in new land assets in Southwest Florida. After several years of minimal new construction activity, developers and builders are now moving rapidly to capitalize on “shovel ready” land with zoning approvals already in place. Getting planning permits for raw land is both lengthy and costly, leaving these developers ready and willing to pay premiums to avoid this risk and just “get in the game” Investing in land is inherently speculative and it generates no income. However if your timing is right, if planning permission is in place and if your strategy is solid, it can be an excellent store of wealth. As the owner of a landplot, your capital returns will be magnified several times over if house prices rise and you are located in the path of growth. We believe that the future commercial growth in the expanding north west of Cape Coral will result in higher than average price growth in the prime home sites west of Old Burnt Store Road. If you were to visit the locations we are promoting you will see beautiful homes and busy construction sites. When you consider that land plots have lost 80% and in some cases 90% of their previous value, we feel this is a tremendous arm’s length investment opportunity at a very low entry level.
  • 10. exit Strategy Torcana don’t do gimmicks such as voluntary builder “buyback option” clauses and bundled closing costs (see FAQ section for examples). We believe long term relationships are best built using a straightforward and transparent approach. When you want to sell you will list the property locally for sale on the MLS (Multiple Listing System) with one of our local real estate professionals. This is where the majority of land plot sales take place and Torcana will be happy to assist in this simple process. A local agent working on behalf of a home buyer looking for a site or a local builder looking for land plots will be your most likely buyers and you will achieve a fair market price for your property at that time. You will either be dealing with owner occupiers or people building for owner occupiers. These are the largest target markets and by far the most efficient exit strategy. As many of you may wish to add value to your land by building a home on it, we have negotiated with local builders and lenders in order to provide a range of high quality options. Please see the next two pages for full details. Whichever exit strategy you choose, Torcana will be maintaining close relationships with local builders and developers and we will continue to update our buyers on the pulse of the market and potential sell dates and prices. transparent approach. “ “ Long term relationships are best built using a straightforward and
  • 11. build your own home / investment property However, buyers wishing to add significant value to their land and increase its profitability substantially can do so by building a home on it. There are three main strategies available to those who choose this route: 1. Rent it out long term. You can earn a monthly income from the property for many years prior to selling. 2. Use the property as a second home with the option of renting it out when you´re not using it. 3. Sell the brand new home immediately after you build it to the local market at the most desirable current market rate. The key to implementing these three strategies is to work with local professionals who can make things happen in a professional, contractual, hardworking and honest way. This is where Torcana once again have done our homework as we have already sat down with several successful Cape Coral builders and management companies. These trusted partners have decades of experience of building homes in Cape Coral and they have recommended four of the best floor plans that the local market will want to rent and buy. of our plots west of Old Burnt Store Road tend to attract wealthier residents and it is recommended that buyers choose $110 $120 per square foot options with larger floorplans and higher quality finishes such as granite counter tops and upgraded kitchens & bathrooms. We predict many of our buyers will want to avail of these opportunities and there are several lenders who can finance the building costs for both US residents and overseas residents. The cost of an entry level home in Cape Coral is approximately $100 per square foot on a non-waterfront landplot. The locations “ Add significant value to your land by building a home on it “ As discussed earlier in the brochure, land is a great store of value and the capital appreciation potential is dramatic when house prices are rising. This passive investing approach is preferred by many buyers.
  • 12. CAPE CORAL Model Homes Below you will find four options ranging from entry level to very high end. As the needs of each buyer will be quite different (depending on your budget and long term plans) we are very happy to provide advice and guidance to all clients on a case by case basis. As we are in close contact with several reputable builders and finance experts, we´re confident that every budget and taste can be catered for. The Bayshore 1144 sq ft 3 bed 2 bath + garage Cost: $100 per sq ft Price: $114,400* 1540 Model La Casa The Tobago 1540 sq ft 3 bed 2 bath + garage Cost: $110 per sq ft Price: $169,400* 2087 sq ft 3 bed 2 bath + garage Cost: $120 per sq ft Price: $250,440* 2501 sq ft 3 bed 2 bath + garage + Study Cost: $120 per sq ft Price: $300,120* * Prices valid as of August 2013 and subject to change. Land preparation, swimming pool, sea wall or other amenities not included. Average construction time: 120/150 days from date permit issued Property management fees for annual leases: 10% of gross rent collected Vacation rentals: 15% of rent collected Rental rates for annual leases (3/2 home): $1,200 to $1,800 per month pending location and size Vacation Rental Rate: $1,000+ per week
  • 13. Our available landplots Torcana have secured an exclusive range of land plots directly from banks or bulk sellers which range in size from 10,000 sq ft to 15,246 sq ft. The majority of our available lots are located west of Old Burnt Store Road and are priced below $20,000 – a huge discount on pre-crisis prices. According to Trulia, the typical house prices in this expanding part of Cape Coral range from $278,000 - $316,000. To view a current list of available landplots including detailed maps and price comparisons for each plot, please copy and paste this link into your browser:
  • 14. sample Purchase The plot below is a standard 10,000 sq ft vacant lot located adjacent of Old Burnt Store Road in North West Cape Coral. It is available to purchase for approx. 15% of its peak price in April 2005 and there are several luxurious family residences in the plots nearby (see google map link). TYPE VACANT-DRY Ref 2 ADDRESS 1539 NW 40TH PLACE Plot Size 10,000 sq ft Previous sales prices Dec 2004: $84,000 April 2005: $115,000 Current Price $17,100 Closing Costs $600 (approx.) Annual Taxes $240 (approx.) Zoning Residential: Single Family Home Build Cost $115 - $125 per sq ft please copy and paste this link into your browser:
  • 15. PURCHASE Process The purchase process is very transparent and straight forward: STEP 1 STEP 6 Choose your landplot Local authorities transfer ownership to your name and send warranty deeds Pay 15% deposit to local Title Company STEP 5 Closing costs will be approx. $650 for a sub $20,000 plot STEP 2 STEP 3 STEP 4 Balance of purchase price paid within 30 days Sign and return purchase agreement
  • 16. Frequently Asked Questions What are the title insurance and closing costs? Typical closing costs to be paid by the buyer are $600 per plot. Does the land have to be insured against liability? No, the majority of the vacant lot owners do not carry liability insurance. What are the most popular sales gimmicks? “Buyback option clause guaranteeing 50% profit”. A clause that gives the seller the right to repurchase the plot for a fixed amount (e.g. 50% above purchase price) within a specific time frame (e.g. 3 years). The buyer can´t win in this scenario as the seller would only execute the clause if they had the cash available and if the agreed amount represented a discount on existing market rates. “Three years taxes and closing costs included”. One of the oldest tricks in the book, whereby a seller simply adds the annual fees and closing costs onto the purchase price. Instead of paying minor fees over a number of years, you pay for them all in advance. If you´re unlucky, you´ll also have the additional trouble of chasing the seller if they haven´t been paying them. What is the annual cost of owning a plot? The owner is responsible for property taxes and lot mowing which is performed by the city or county at a cost of $20.00 +/- per month. Owners are billed directly for this service by the city or county. Is a land survey necessary? If the land is vacant and the legal description is clear and acceptable to the title company, a new survey is not necessary. If the investor is securing a loan, the lender may require a survey, which generally costs $250 and requires 10 to 15 days. Are all landplots zoned for residential construction? Yes, all plots are currently zoned for residential single family homes. In general, the city or county cannot downgrade a zoning but can they can upgrade it. By definition, the vacant residential plots, which are platted and recorded in the county records are buildable. Information for every plot in the city is available via the Lee County website: What is the average building cost? The current average cost of construction for a typical 3 bed 2 bath 1,500 sq. ft. home on a dry lot, in Cape Coral is $115 per sq. ft. The typical cost of a 2,500 sq. ft. home is $120 per sq. ft. Homes on water lots typically start at $175 per sq. ft. These estimates do not include the cost of purchasing the land and there will be additional fees for site preparation and permit costs. Who owns and maintains the roads? The city and county authorities. Are utilities and phone/ internet access available? Yes, local utility companies are mandated by the city and county to provide these services. Whenever a house is being constructed, the owner/builder simply has to make an application to the utility company and they will be installed immediately. Garbage collection is a city provided service and charged directly to the home owner. There is no charge if the plot is vacant.
  • 17. Reserve your plot today If you are excited by this opportunity and have enjoyed learning about land investment, please examine our site plan, select your favourite unit(s) and call us to discuss the next steps. We have visited each of these plots individually and are happy to endorse this as an excellent investment. There is a lot of cash going into Florida right now and we are expecting a very high demand for a limited list of landplots. Please copy and paste the following links into your browser: Availability List & Maps: Video Presentations: Additional Due Diligence General Economic Information: Cape Coral Real Estate Overview: Demographic Summary: Official Cape Coral Zoning Map: Cape Coral Canals Map: City Planning & Growth Plan: Cape Coral Business Environment: Torcana Ltd USA: +1 321 806 1195 Ireland: +353 1 4433 991 UK: +44 207 193 4024 Skype: torcanaltd This page contains general information relating to the purchase of land and its contents should not be construed as legal or other professional advice. This is not an investment offering. While all reasonable care has been taken in the compilation and publication of this information, Torcana Ltd make no representations or warranties, whether expressed or implied, as to its accuracy or completeness and the content is provided for information purposes only. All prices and comparisons listed are based on information provided by third parties. Information is deemed reliable but not guaranteed. All pricing and availability and terms are subject to change without notice. Torcana Ltd shall not be liable, directly or indirectly, to the user or any other third party for any damage resulting from the use of the information contained or implied in this document.