There's no early redemption with Pacific West Land's investments. "Ours are designed for people to be around for the ride," Stever says. "That's why it's important that it be only a small portion of a portfolio."

Because the deals are structured as limited liability companies with partnership-like structures, investors need to file an IRS Schedule K-1 tax form. Stever says there might be some passive losses in the early years of the investment because there's no income to offset passive loss expenses on the K-1.

The company is currently raising money for its first fund, the Pacific West Distressed Asset fund, which was set up to buy nonperforming notes, first trust deeds and real estate from banks at Federal Deposit Insurance Corporation (FDIC) auctions, as well as directly from distressed sellers. The fund's investment minimum is $100,000, and the annual management fee is 1.5%.

Michael Ling, the RIA in Boise, first looked into Pacific West Land about three years ago, and a short time later had the chance to observe the company up close when it acquired property in Boise. "When we vetted them, we called their bank and current and past investors," Ling says. "We had an attorney in town read over their material."

In the end, his firm felt comfortable investing with Pacific West Land, and it currently has some client money placed in projects in Boise and in Arizona. "We put no more than 3% to 4% of a total portfolio into this type of investment," Ling says. "Even as part of the real estate component in a portfolio, you don't want it to be more than 10%."

Ling says these investments are treated as capital gains, and that he places them mainly in taxable accounts.

Patience Required
The equity markets have snapped back quickly since March, but investors probably shouldn't expect the same for real estate. "The land business probably won't get as quick a lift that the stock market got," says William Shopoff. "Our business plan at minimum looks out two years, and sometimes as long as six to eight years for capitalizing on the marketplace. Our strategy is that prices will recover. They don't have to fully recovery for us to execute our plan."

In most cases, investors in Shopoff properties need to be accredited. To attract non-accredited investors, the company in 2006 formed Shopoff Properties Trust Inc., a publicly registered, nontraded REIT with a minimum investment of $20,000.

Its affiliated broker-dealer, Shopoff Securities Inc., is the distribution company for Shopoff Properties Trust. It works with other broker-dealers as well, most of which are fee-based because it's a no-load product.

Holding periods for Shopoff's limited partnership deals can last as long as eight to ten years. There are no redemption opportunities for those shares until the properties are sold.