This section is from the book "Practical Real Estate Methods For Broker, Operator & Owner", by Thirty Experts. Also available from Amazon: Practical Real Estate Methods for Broker, Operator, Owner.
Another field for operating in vacant land is the purchasing of acreage and its development into city lots, by cutting through streets, laying sewers, paving, etc. Such property is sometimes sold at auction before any physical improvements have been made, or sold in lots or plots, after improvements have been made, at auction or at private sale. Acreage property also must be carefully financed. The most desirable method, from the operator's standpoint, if he cannot or does not wish to pay all cash, is to procure a blanket mortgage, which is a mortgage covering the whole purchase, with release and substitution clauses; that is to say, with the holder of the mortgage agreeing to release any portion of the property desired from the blanket mortgage, and, if desired, taking a separate mortgage on the parcel so released.
Many operators sell these lots on the instalment plan, in which case the purchaser should be careful to assure himself before signing his contract that the seller has made proper arrangements to deliver the land purchased, free and clear, at the time the last payment is made. Sometimes land is sold where there is a blanket mortgage; then, when the time for delivering the deed arrives, the seller cannot give a good title, because he cannot release it from the blanket mortgage and has not money at hand to pay off the whole mortgage.
A good example of what can be done in the way of developing acreage property can be seen in the Hunts Point section of the Bronx, where about three thousand city lots are being improved by building only the best two family, four and five story houses, and even six stories with elevators. This has created a model section of the city, and increased land value from the price per acre to the price per 25 foot lots.
So we see that the operator has ceased to be a gambler and has become a potent factor in the development of social welfare. He is even a benefactor to the community. No one will dispute that the mere fact of his making a profit or good return on his investment detracts from the fact that he is constantly increasing the income and credit of the city through the greater tax value he creates; that he is studying and experimenting to improve the housing conditions of the inhabitants; that he is furnishing employment for armies of workmen; that through modern construction, he tends toward increasing the business of the shopkeeper, merchant and manufacturer, and that he is accomplishing this through a legitimate business along scientific lines.