Hello, I am a new investor and I have decided that starting off, for now, I'd like to invest in only vacant land. Specifically, I am looking at land within subdivisions or decent areas of town that people would probably like to eventually build homes on. I have a few questions and would love to get some insight:
1. If I purchase the land from the state, can I immediately sell it to someone perhaps for a fraction of what it's worth?
2. Is quiet title action necessary for vacant land?
3. If it is necessary, what do I need to do to prove possession besides cutting the grass, clearing shrubbery, etc.?
4. If the tax deed is reallllllyyyy old, is there anything "special" that would apply?
Any and all help is greatly appreciated! Thank you so very much!
Hi @Ebony King , you came to the right place with your questions. I like your strategy, and it is one of my favorites. That's because I am not handy with power tools and don't seem to work well with contractors, so buy-and-fix is not a good one for me:(
1. You can immediately sell property you purchase from the state, but due to outstanding redemption rights, the buyer runs the risk of it being redeemed for less than what they pay you. Make sure you disclosed redemption rights. Usually, only the next door neighbors will risk the money to pick up another lot at a cheap price.
2. Quiet title is necessary if you ever want to get full retail price, ever want title insurance, or if your buyer or its lender will want title insurance.
3. Engaging in possessory acts is different from lawfully entering on the property. You will almost always have to file an ejectment lawsuit. Even though property is vacant, that does not mean it is abandoned. "Abandoned" means the owner has no intention of ever doing anything with the property. It depends on what is in the owner's brain. It's really hard to prove intention if you end up in court. For that reason, ejectment is safest.
Thank you so very much, @Denise Evans for responding! I am seriously so honored thsat you responded and was really hoping that you would lol! I'll see you on July 20th for your intro class! :)
One more question @Denise Evans ...If I decide to do quiet title for whatever reason, do I have to do ejectment, too?
@Ebony King , before you can do a quiet title lawsuit, you MUST be in "peaceable possession." Often, investors will change the locks and take possession, or cut grass and do stuff on vacant land, and claim they are in possession. Then they file a quiet title lawsuit and somebody will dispute it, saying the investor might be in possession, but they were not in "peaceable possession." The judge will examine whether the property was legally abandoned and, if not, did the investor file an ejectment lawsuit. If the answer to either one of those questions is "yes," then the quiet title lawsuit can proceed. If the answer to both of those questions is "no," then the quiet title lawsuit will be dismissed and the investor kicked out of court.
@Ebony King I am doing the same strategy with vacant lots in subdivisions... so thanks for sharing your strategy and questions.
can you share how you are marketing your lots for sale — or do you have readily available buyers lined up.
and are you coming across external liens on the lots/land?
@Denise Evans thank you for your insight on this topic!! I’ll keep the questions flowing on this thread... how should we handle any external liens if they are present.
Thanks in advance to both!
@Tai Bhattad , lienholders must be notified of the tax sale, your interest in the property (tax certificate or tax deed) and your contact information. They have one year after receipt, or the three year administrative period (whichever is longer) within which to redeem
Thanks for the quick reply! Will continue my due diligence as a newbie 😊 thanks again @Denise Evans
@Tai Bhattad I am still a newbie and haven’t had the opportunity to sell anything. I have purchased 2 lots(1 is a certificate and the other is a deed). The plan(for now) is to follow through the process of gaining full title and sell them at market rate. I realize that this will take a while, though. If I don’t follow through with the full process, I’ll more than likely just sell them to another investor for far less than they are worth, but still more than what I paid and move on to something else!
Nice! I’ll keep checking on ya and send my updates as well. @Ebony King