Tuesday, July 15, 2008

Land Banking on Mob Wars

In a short sentence, Land Banking is where you use Undeveloped Lands as a safe haven for up to $110 million, tax-free.

Land Banking ONLY works under these conditions:
  • All Undeveloped Lands (from Empty Lots to Container Yards)
  • The first 10 quantities of Lands purchased in bulk.
  • Selling the 10 quantities in bulk.
For example, when you start with zero Empty Lots, the next price indicated is $5000. When you buy 10 bulk, it would cost $50,000 and the next price will then be at $10,000. Every time you sell a property, you will only get back half the value, but of the value of the next price indicated. This means when you sell those 10 Empty Lots in bulk, you get back exactly $50,000. Zero net loss. And oh, for however long you leave the Land Bank alone, you are GAINING interest in the small form of the income against those properties.

Compare this with putting money in the Mob Wars Bank where you are taxed 10% for each deposit. Ouch.

When you buy 10 of each Undeveloped Land as a Land Bank strategy, you would have put aside exactly $110,550,000. And that's a sum that's untouchable by other mobster attacks.

No, Land Banking does not work with the Establishments. When you sell Establishments, you only get back the half value of the Establishments and nothing on the Undeveloped Lands.

Important Note: How do you cash out the Land Bank to make other purchases?
Remember: Always sell in 10s.

When you can afford to buy 5 Apartments, you gain the best purchase value and cash retention when you follow this sequence:
  1. Sell your 10 (LandBank) City Blocks in bulk first
  2. Buy 5 City Blocks in bulk
  3. Buy the 5 Apartments (which would use up the 5 city blocks).
Trust me, you'd waste money on any other sequence.


Stylingduke said...

Is my math wrong or this whole buying empty lots over banking your cash is false once you buy the initial 10 empty lots?

The theory:
(I) original starting price, you will expense a) $5,000 * 10 = $50,000.

Now when you sell them [ALL TEN] in one go you will still be paid at
b) $10,000 * 10 * 50% = $50,000 (Check - all good)

This theory only holds true...if each 10 emnpty lot you buy ..2x the price you bought it for
but it doesn't..once you buy the initial 10 empty lots
the price of the emtpy lots only increase by the intial amount..
5,000, 1,0000, 15,000, 20,000,25,000,30,000,35,0000 etc..

(II) Thus, here's where the idea fails:
a)Buy the 2nd set of 10 empty lots: $10,000 * 10 = $100,000
b)Sell: $15,000 * 10 * 50% = $75,000
Thus you actually lose 25% vs the 10% in banking (a loss of $25,000).


Shalom said...

Styling, you're restating exactly what was said before. It only works for the FIRST TEN. No one claimed it works after the initial ten lots on any given type of property.

Read the original post more carefully.