While Arizona was one of the states hit hardest by the U.S. housing crash, it finally seems as if there is a light at the end of the tunnel. According to the Wall Street Journal, GTIS Partners has acquired 563 acres of vacant land outside of Phoenix.
GTIS president Tom Shapiro told the source that the parcel has room for about 3,500 single-family homes and apartments, plus 50 acres for retail, office and hotels.
"When home prices go up, land prices really go up," Shapiro told the news source. "We are buying at wholesale prices, and will be selling at retail prices" to contractors, he added.
Since home builders nowadays often prefer to buy land in smaller chunks, GTIS plans to divide the parcels into approximately 50 acre-sized pieces. Additionally, the New York real estate investor said it plans to build the main roads, water lines and other major infrastructures to prepare the land to sell to home builders.
An amortization schedule for loans will be highly beneficial for lenders in situations like this, when there will likely be an influx of borrowers who want to own their own property. Additionally, mortgage loan software can ensure that payment plans are designed to suit homeowners' needs.
Shapiro did recognize, though, that if the economy hits another rut – stalling the housing rebound – his company could be left with undeveloped land that is not providing any income. Regardless, even if prices fall, he said that GTIS can hold the land without facing immediate pressure to generate a return and pay back a loan.
Housing investments can be risky for a multitude of companies and individuals. But when the right measures are taken, like lenders using an amortization calculator, some of the negative outcomes can be avoided.