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Chabu Nsokoshi
  • Flipper
  • champaign, IL
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Due Diligence for Your first Land Investment

Chabu Nsokoshi
  • Flipper
  • champaign, IL
Posted Feb 20 2018, 00:39

Hello BiggerPockets Nation, 

@Joshua Dorkin should address everyone on this site as part of "the BP nation". Like an elite national citizenship of it's own. Anyways, speaking of elites, I'd like to speak more to people investing in land. I have done some research on the process one should do before purchasing their first land investment, and wanted to post it here, publicly for additional input. The list is not extensive and hence why I'm posting it, in hope that someone with more knowledge can have more to add. 

Please add to the comments. 

With no introduction left, here's a quick seven point checklist that a  land investor should investigate before purchasing.  

1. Run a price comparison with similar properties – Just as all real estate, comps are important in making sure you're paying the right price for your investment. You can use Zilliow.com, Landandfarm.com, Trulia.com or ask a broker. To find properties that have sold and are similar to the propter you're interested in. 

2. Explore the Physical land usage – Get a survey done to find out what the exact boundaries of the properties are. In today's world we have the beauty of using tools like (http://earthexplorer.usgs.gov/) or (www.maps.google.com) to get aerial views and topographical maps. You can learn a lot from these maps like historical land patterns, farm practices, and natural land management. 

3. Investigate the Legal Regulations – Visit the city/county office and inquire the zoning verification. Ask for future changes or building projects or developments that are planning to take place in the area. Pro Tip: Search for tax information.

4. Get access to the utilities of the property – Find out who the local utility companies are for septic, sewer, water, electric, and contact them. Any wells on the property or inherited equipment that can be improved or sold? Seek the raw potential that can be improved.

5. Assess the roads to the property – How accessible is the land? how much traffic gets through the roads? Road maintenance or improvements you should know about? 

6. Find out if the land is currently under any HOA's or POA's. Homeowner's association (HOA) and Property owners association (POA) are corporations made by developers for the purpose of enforcing rules for the properties in their community or condominiums. Here's where you can find out what exactly you can do with your land.

7. Confidently resolve title issues – Ensuring the ownership of the property is very important. So closing with a title company should not be negotiable. find out if there's any liens or financial dedications tied to the property. Make sure the seller is the true owner and is selling the property as agreed on.  

And that's it, SEVEN! This list is not exhausted and I invite people to add to the checklist to improve it. Add on to creating wealthy real estate investors. 

Books to read: Buying and Investing in Land by Dianne Ronnow

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