I remember early on in my adulthood, I knew that I was going to set my roots in one of two areas; either the stock market or real estate. At the time, it seemed as though anyone I spoke to that was wealthy built their wealth either through strategic investments on Wall Street or on Main Street. Interestingly, I recently came across a company that gives investors an opportunity to set their foundation in both areas, and at what I believe to be a discount. That company is International Land Alliance (ILAL).
What Is International Land Alliance
As the name of the company implies, International Land Alliance is a company that is focused on investing in real property, developing this property, and turning their investments into resorts, communities, and more.
However, what I find to be most interesting about the company is the strategy used in purchasing and developing property. The company starts by finding strong land buying opportunities. In particular, ILAL is currently focused on opportunities in Mexico. This gives the company a low cost opportunity to tap into a high-end southern California market.
Why Is This Strategy So Important?
First and foremost, when it comes to buying, doing so in Mexico gives ILAL the opportunity to tap into incredibly low cost raw land investments. At the same time, the company is investing in a country that analysts peg has the country with the highest potential for real estate investments in Latin America. However, purchasing in Mexico is only part of the strategy.
Recently, ILAL has been focused on investments in raw land in Baja California, Mexico. Being focused on this particular city in Mexico is just as important, if not moreso, as taking advantage of the strong-returns offered by investing in Mexico as a whole. The reason for this is the city’s proximity to southern California.
Baja California is very close to San Diego, Long Beach, and Los Angeles. This is important as Mexico is very appealing to Californian travelers. It’s also worth mentioning just what all of this means from a dollars and cents perspective.
At the moment, California homeowners spend about 22% of their income on housing costs, ranking as the second highest housing costs in the country. Renters spend 32.8% of their income on housing, ranking as the third most expensive. At the same time, median rent in California comes in at about $1,375 per month, which is more than 40% of the national average with home prices coming in at more than double the national average.
As a result of the incredibly high housing costs in California, we’re seeing more and more Californians moving to Mexico. In fact, in the ten years from 2006 to 20016, more than one million Californians made the journey to set their roots in Mexican soil.
Much of the growth in demand for real estate in Mexico is driven by retirees, making now a perfect time to invest in the space. In fact, with over 75 million baby boomers in the United States and 10,000 of them reaching retirement age per day for the next 19 years, demand is likely to continue growing. This is especially the case considering that more than half of Americans over 50 have $25,000 or less saved for retirement and will be looking for lower-cost options to live out their golden years.
So, by investing in an area in Mexico that is in close proximity to several high-cost California cities, ILAL is building out properties that are likely to be met with incredibly high demand as Californians look for low cost options to stay close to friends and family while avoiding astronomical rent or mortgage expenses.
Key Projects Under Way At International Land Alliance
At the moment, International Land Alliance is working on five key real-estate opportunities:
- Villas Del Enologo – Villas Del Enologo is a 2.6 acre parcel within a prestigious area known as Rancho Tecate. ILAL is planning on building 24 two bed two bath villas on the property with a private wine cellar in phase one with an additional 22 villas coming in the second phase. A recent appraisal put the property value at $1.3 million.
- Valle Divino Resort – This resort includes 123 residential lots and 3 commercial lots on 20 acres in Ensenada, Baja, Mexico. A recent appraisal values this property at $6 million.
- Oasis Park Resort – This resort includes 1,344 residential and commercial lots on 497 acres of land. A recent appraisal valued this property at $16 million.
- Emerald Grove Estates – Emerald Grove Estates features 80 acres of developable land with an 8,000 square foot event venue. There are also 4 acres of citrus trees and a planned 20 acre vineyard helping to bring the property’s value to $2.8 million.
- Costa Bajamar Oasis – Recently, ILAL announced that Costa Bajamar Oasis had been readied for development. The Oasis is located within a gated master planned golf community. Starting prices of homes in the area will be $109,000 and the property offers oceanfront views. A recent appraisal values the property at $1.15 million.
Interestingly, I believe that the difference between the GAAP value of these properties and the actual appraised value is a key reason for the vast undervaluation seen in ILAL Stock. In fact, the current GAAP value of these properties comes to about $4.2 million. However, the appraised value comes to $27,475,000. As such, the appraised value of these properties means that the company has assets worth more than double its market cap in just its real estate investments. If you don’t see an undervaluation there, I don’t know where you would see one.
A Recent Agreement Solidifies Reliable Energy
One challenge often faced by developers in Mexico is electricity. Unfortunately, the region doesn’t have the infrastructure in place that can support the growing demand.
Nonetheless, International Land Alliance recently announced a new agreement with CleanSpark (CLSK). Under the agreement, ILAL will be using CleanSpark microgrid solutions for their electricity needs. This is key because these microgrids will not only be reliable, they will be green-sourced, creating yet another level of appeal for the average consumer in California, the company’s target market.
To add a little icing to the cake, CleanSpark believed so much in ILAL that they decided to make a $500,000 equity investment in the company as part of the deal, giving ILAL the cash it needs in order to continue moving forward with their development projects.
The Bottom Line
The bottom line here is that ILAL is an up and coming real estate investor and developer that seems to be making all of the right decisions. Opting to work in an area with close proximity to high-end areas in California is the first key to the company’s success. This, combined with the company’s investments in professional teams, high-end power solutions, and quality property development will likely lead to strong profits ahead for the company and its investors.
Don’t Miss The Next Big Story!
Join our free mailing list below to receive real-time news alerts!
Disclosure – Neither the author nor the publication are investment advisors or broker/dealers. Investors are urged to do their own research before making any investment decision. CNA Finance, parent company to Alpha Stock News has been paid thirteen thousand dollars under a 5 month term agreement at a rate of six thousand five hundred dollars per month. In exchange, CNA Finance provides International Land Alliance with research, writing, and other digital investor relations services.