After the gold rush

If you read this post, I will buy your home from you right now. With no hassles. In cash!


The cards have been coming for a few years now. They have the names and numbers of local real estate agents and they list the recent sale prices for comps--or comparable properties--in my neighborhood. The sight of these ever-bigger numbers, I believe, is supposed to stir an irrepressible lust for selling.


What showed up in my mailbox Tuesday morning, however, was something stranger than that. It was a form letter, with the words "I'd Like To Make You An Offer On Your Land!" printed in blue script on the envelope above the address window. (I own an undersized and unbuildable lot next door to my house in Northeast Minneapolis.)


The letter inside was conversational in tone, amiable even:


Dear Michael Tortorello,

Recently while looking through the county records, I noticed that you own property in Hennepin County.

Raw land is an interesting thing. If you use it and get to enjoy it, it's great. On the other hand, if you don't it can sometimes feel like an alligator when you get those tax bills every year (or is it twice a year)--along with the other county fees and/or property associations' charges and let's not forget the insurance costs in case someone gets injured on your property when you are not there.

There are definitely pros and cons, and if you are using and enjoying your property, then you should probably throw this letter away. On the other hand, if you're tired of throwing your money out the window, then we should probably talk. I buy land fast and for Cash! I don't play games! We agree on a fair price, a Cash Price, We sign a real simple agreement: and we can usually close in 30 days.


The letter ("offer# U001L") went on for a few more sentences about simplicity and sincerity, and was signed "Gary Dybdahl, Land Buyer."


It reminded me of an article I'd been reading the previous night in the May issue of Fortune about the real estate frenzy in places like Phoenix, Los Angeles, Austin, and Miami. The article profiles everyday folks who have built up portfolios of 12, 18, 20 properties--all highly leveraged, many of them literally unseen. The author, Grainger David, follows the gold panners as they airdrop into cities to pick up three houses in a matter of hours. They drive in convoys with real estate agents cooing over two-way radios.


After the California market flew over the cuckoo's nest, David explains, developers began inserting antispeculation clauses into their new purchase contracts. These required buyers to actually inhabit the unbuilt dwellings they were intending to flip, with penalties for turnaround sales. David then chronicles what happened next:


It wasn't very appealing to just cash out of real estate altogether. That's because individuals can defer taxes on the sale of an investment property if they make another purchase of equal or greater value within six months. That provided a powerful incentive for speculators to invest real estate gains in yet more real estate--but not in the Golden State. If California was no longer an option, where else was?

With that question in mind, I flipped back to Mr. Dybdahl's gracious solicitation. His name had a familiar, Norwegian ring to it. But it turns out that he's not from around these parts, at least not any more. The return address on the envelope read "Irvine, California 92618."

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