Leverage Makes Huge Difference in Return on Investment Especially in Economic Downturn

LOS ANGELES, CA: Savvy investors are using the principle of leverage to get much greater return on their investments in these tough economic times. The concept of leverage is that with a relatively small amount of cash you can control a considerably more expensive investment. Federal rules require a minimum of 50% payment to buy stock, but you can often buy raw land with only 1-15% cash down. That gives you a great advantage when investing in vacant land, and can add up to astronomical returns.  

As an example, let’s say you made a cash purchase of vacant land for $10,000.00 and you sold it after a period of time for $20,000.00. Your profit of $10,000.00 on a $10,000.00 cash investment is significant, and represents a 100% return on investment (ROI). You have doubled your money by investing $10,000.00 to make another $10,000.00 cash.

On the other hand, if you bought the same land with a down payment of $200.00 and paid $50.00 monthly on a mortgage, at the end of the year the $200.00 you put down plus 12 months of $50.00 equals a total investment of only $800.00 instead of $10,000.00. If you then sold the land at the end of the year for $20,000.00 you would have made the same $10,000.00 profit, but instead of that profit being double your investment, you have made 1250% or over 12 times your cash investment of $800.00.

Lance Dorman, Vice President of VacantLandDeals.com, stated "Today’s economy means not only that there are great deals to be found, but that the principle of leverage, using other people’s money and less of your own, is more important than ever. Investors are using leverage in buying vacant land in California. The idea is to buy raw land where there are no or very few utilities available and the land parcels are only accessible by dirt roads. You select areas where future development is projected. In a few years those plots of land will be worth far more as developments begin in those areas. We specialize in helping investors find these types of opportunities."

VacantLandDeals.com was formed to help investors find land investment opportunities, especially to help them find California land for sale. The company can be reached at 213-500-9578 or http://www.vacantlanddeals.com.