Land banking investment,8-20% return per year, good?

[brattzz]

lolz! pianist, you are a sentimental guy,
Luckily logic prevails over heart!

i remain skeptical about this type of investments and stay far far away!

[Musicwhiz]

I believe there are several important criteria we should all look for in investments, and for which I personally feel are important for an investor to consider. In any type of investment, we should seek:-

1) Liquidity - This means the investment should be able to be bought and sold easily, and cash recovered within a reasonable amount of time. Real estate in general is considered the most illiquid, equities are the most liquid. Bonds are somewhere in between.

2) Consistent Returns - This may be in the form of dividends for equities, rental income for real estate or coupon payments for bonds.

3) Capital Appreciation - The underlying asset should show objective and verifiable evidence of capital appreciation, either through an appreciation of the asset value (in the case of real estate), or an improvement in business conditions (for equities) warranting a higher market price.

4) Clarity of Communication - Investors should know all there is to know about an asset, and information should be freely available, communicated in a timely manner, and be comprehensive and informative.

If we refer to land banking as an asset class, I doubt it would satisfy 3 out of the 4 criteria:-

1) It is highly illiquid - you are not allowed to sell the land you bought anytime you wish, and have to wait for "planning permission" or other types of regulatory approvals. Even then, the Company may delay the proceeds further as there are additional layers to clear.

2) It does not provide a constant stream of income - there are no cash flows associated with a piece of land waiting to be re-zoned or awaiting planning permission. You end up waiting without getting paid to wait.

3) Clarity of information and timely communication - it's basically a "get info only when you ask for it" policy, and the information neither seems timely nor complete.

I have doubts about the 4th - capital appreciation, because so far no one has been able to provide me with a 7-8 year CAGR of returns on his investment in land banking. So the jury is out for now on this point, but just based on the above 3, I would avoid such schemes.

Caveat Emptor, please.

[specuvestor]

as long as walton makes monies, it is here to make an impact as some of our country's better brains are also sucked into it to sell u some land. back in my bird's head, i was wondering...why did the govt gave her scholarship monies to come out join a landbanking company? why did the parents of that the other one fund her medicine studies to come out not practising medicine? is a personal choice i guess

Fast money always have its lure, from investor to agent, trading on tips to pyramids, which is why the idea of profit maximisation is flawed in the long term.

[Temperament]

There is no shame in admitting we are OPMI, bigger shame is when we delude ourself as being more sophisticated than we are (ie beyond our circle of competence) or can leap higher than a vulture fund.

I like the last paragraph.

“知彼知己，百戰不殆；不知彼而知己，一勝一負；不知彼，不知己，每戰必殆“
Translation:
"if you know your enemies and know yourself, you can win a hundred battles without a single loss.
If you only know yourself, but not your opponent, you may win or may lose.
If you know neither yourself nor your enemy, you will always endanger yourself."

(sharing a similar thought)

I use a more derogatory term 'retail meat' to always remind myself of this fact. I have another description term for those who delude themselves, '井底之蛙' (translation: the frog in bottom of the well, who looks up and believe that the sky above him is all there is, and only exist for it)

Instead of whole day say 'stay within circle of competence', EXPAND the circle of competence by different means. Just be prepared to pay tuition fees when you wonder out.

A lot of opportunities in life are found by going into the unknown and 'trial & error'
"Learning from others mistakes' is usually for the obvious, amateur mistakes. You cannot grow if you just 'learn from others mistake'.

"Discovery require experimentation" - Daniel Whitehall ...hahaha...

Agree... Know thyself and thy temperament, so you know your risk limits and amount of tuition fee to pay to expand your multi-disciplinary approach but keeping in mind one of the best Hokkien adage i always remember is : Kiang Jou Hou, Mai Geh Kiang

As usual 中庸之道

Yes by watching alone how a thing is done, you only have a mental images. Not until you try to do it yourself then you know where your mental images is wrong. After you learn "all' you have to learn, you may discover you can do it your way too.

Real life Experience:-
i have been paying attention to matters that concern financial and the stock markets for many years. Perhaps due to my limited education i found it very difficult in the beginning. But i come to read something that say if you want to be an "expert" in some field of knowledge you can always achieve to a certain level of competence even if you are not qualified to go to the U. You can go to NLB. i still believe in this till today.

So not until the the age of 40, i gathered enough investment "ideas" (so i thought), threw my cautions to the wind and plunged myself into the STOCK MARKET in 1987/1988. Horrows followed. My 1st bear market's experience just when i dared to take the plunge.

To cut the story short, i agree fully:-
"A lot of opportunities in life are found by going into the unknown and 'trial & error'
"Learning from others mistakes' is usually for the obvious, amateur mistakes. You cannot grow if you just 'learn from others mistake'.

Nobody can learn anything without doing it himself.
Yet don't go and try "puff the magic dragon" hoh!
Do you need to learn that to invest?

[wahkao]

I have doubts about the 4th - capital appreciation, because so far no one has been able to provide me with a 7-8 year CAGR of returns on his investment in land banking. So the jury is out for now on this point, but just based on the above 3, I would avoid such schemes.

walton says they give 12% CAGR
your experience says nobody have successfully get the returns as promised.

fishy?

[NTL]

I have doubts about the 4th - capital appreciation, because so far no one has been able to provide me with a 7-8 year CAGR of returns on his investment in land banking. So the jury is out for now on this point, but just based on the above 3, I would avoid such schemes.

walton says they give 12% CAGR
your experience says nobody have successfully get the returns as promised.

fishy?

Not many people invest with Walton anyway. Within my group, I am the only one who place the smallest bet possible with them. I am hoping that the plot I holding will be sold, and I will know if what they promised is true.

Numbers provided by the manager in 2012 were:

"My own project, I first invested with Walton in August 2005 @ C$25,000 was offered November 2011 @ C$46,000. That’s 84% in 6 years. Simple returns of 12% p.a.
Another of our projects, clients invested C$43k / acre in 2002 was offered C$135k / acre in 2010. That’s 213% over 9 years. Simple returns of 23% p.a.
One recent offer, clients invested C$61k / acre in 2004 was offered C$143k / acre in December 2011. This is 134% in 8 years. Simple returns of 16% p.a."

Of coz, I have no way to verify if those numbers are true. Only when mine got sold, then I know if it is equally true.

I guess investing in Walton is almost like buying a old property, and hope that it get enbloc somewhen down the road...

Good Luck to me!

[Temperament]

I like the last paragraph.

“知彼知己，百戰不殆；不知彼而知己，一勝一負；不知彼，不知己，每戰必殆“
Translation:
"if you know your enemies and know yourself, you can win a hundred battles without a single loss.
If you only know yourself, but not your opponent, you may win or may lose.
If you know neither yourself nor your enemy, you will always endanger yourself."

(sharing a similar thought)

I use a more derogatory term 'retail meat' to always remind myself of this fact. I have another description term for those who delude themselves, '井底之蛙' (translation: the frog in bottom of the well, who looks up and believe that the sky above him is all there is, and only exist for it)

Instead of whole day say 'stay within circle of competence', EXPAND the circle of competence by different means. Just be prepared to pay tuition fees when you wonder out.

A lot of opportunities in life are found by going into the unknown and 'trial & error'
"Learning from others mistakes' is usually for the obvious, amateur mistakes. You cannot grow if you just 'learn from others mistake'.

"Discovery require experimentation" - Daniel Whitehall ...hahaha...

Agree... Know thyself and thy temperament, so you know your risk limits and amount of tuition fee to pay to expand your multi-disciplinary approach but keeping in mind one of the best Hokkien adage i always remember is : Kiang Jou Hou, Mai Geh Kiang

As usual 中庸之道

Yes by watching alone how a thing is done, you only have a mental images. Not until you try to do it yourself then you know where your mental images is wrong. After you learn "all' you have to learn, you may discover you can do it your way too.

Real life Experience:-
i have been paying attention to matters that concern financial and the stock markets for many years. Perhaps due to my limited education i found it very difficult in the beginning. But i come to read something that say if you want to be an "expert" in some field of knowledge you can always achieve to a certain level of competence even if you are not qualified to go to the U. You can go to NLB. i still believe in this till today.

So not until the the age of 40, i gathered enough investment "ideas" (so i thought), threw my cautions to the wind and plunged myself into the STOCK MARKET in 1987/1988. Horrows followed. My 1st bear market's experience just when i dared to take the plunge.

To cut the story short, i agree fully:-
"A lot of opportunities in life are found by going into the unknown and 'trial & error'
"Learning from others mistakes' is usually for the obvious, amateur mistakes. You cannot grow if you just 'learn from others mistake'.

Nobody can learn anything without doing it himself.
Yet don't go and try "puff the magic dragon" hoh!
Do you need to learn that to invest?

i am sorry if anyone reads me as i am for Land banking investing. Actually i am in agreement with MZ's thinking. But if you are so rich you can purchase a piece of land for future development, then it may work. i know it worked for some Myanmar ex working colleague who did just that. But in his home country which was so much under-develop then.

[corydorus]

Hello ! Nothing is free in this world. Do we really think people can do all the work and you just throw money to them to invest can get so high returns ? Obviously not. If so easy, by demand and supply logics, our dear developers will all be there already. So is my uncle and auntie.

Even if the return is truly high, you did not see the risk level they have put you in. And happens to be lucky that's all. I will never put a cent in such investment personally.

[Ray168]

Someone share his experience in land banking investment in Tan Kin Lian FB.
Post here for VI readers (repost with permission)

My investment in teak trees
.
January 21, 2015 at 6:56pm



Dear Mr. Tan

Please help me to share this article in your Facebook page.

I am a current investor in Jardin Smith International Pte Ltd (JSI) based in Singapore. Besides land banking, JSI also secures investors for agricultural products.

I was one of the earliest investor in their teak products (sold by APC and now fronted by APS as the marketing agent in Singapore).

Since May 2014, I have been following up with JSI wrt my teak investments. Unfortunately, there are a lot of unanswered questions to date and this eventually lead to APS offering a verbal package settlement when APS took over the case after the person in charge at JSI left during the last quarter of 2014. More unfortunately, APS/JSI/APC are now refusing to fulfill some of the terms of the verbal settlement terms. I am currently exploring legal options at my end.

For now, would I like to share my experience and encourage all teak investors to start asking questions including but not limited to the followings:-


a) APC has advised that APC has never sell Gliricida as an ongoing revenue as per the marketing materials presented to investors by JSI. APC only give returns on Gliricidia up to 5 - 6 years depending on the teak growth rate.

b) For investors with contract terms requiring APC to submit annual reports wrt to the growth status of your teak trees, please note that APC has not been submitting them for my case and it becomes a problem when I get a shock from the growth numbers specific to my trees.

c) For investors who were given free 7 years old teaks (25 for every 250 teaks purchased), please check and ensure that the teak trees are growing normally. (I was initially told my 25 11 year old free teak trees are worth only $1000 and later on quoted another number $11,000 when I challenged them). Anyway, the quotes are far from the the projected price and the measurement of the teak trees as at the 7th year onwards was not given for subsequent verification to establish the health of the trees at that point in time .... We were told they are healthy trees).

d) For those who have received yearly reports from APC, you might want to verify the latest numbers for your teak trees as compared to the average numbers provided by the APC report. There is a huge gap for my case which cannot be reconciled.


The above are the key issues I faced. Will leave it to you guys to find out more for yourself.