Reston, VA · Member since 2015 · 38 posts · 2 votes
I'm looking at buying some vacant land in the southwest, which I've never done before.
I'm surprised to see some of this land sounds pretty cheap, like $2,500 for 10 acres in the wastelands of New Mexico for example. It's just land, no utilities. My use of it would be to camp on it with my RV and maybe do some rock hounding and prospecting. Some day, maybe I'll build a home on it with several RV pads with full hook-ups to rent out.
But for $2,500 for 10 acres and maybe just $20 per year in property taxes, I'm wondering what's the catch.
The company selling lots like these from NM to AZ to NV, charges a $400 doc fee and says this on their website:
"What kind of deed will I receive? You will a receive a special warranty deed, which means the seller is guaranteeing the property wasn’t encumbered during the time of his/her ownership."
OK, so what are the pitfalls of buying land like this?
Is this some kind of scam like I buy the land and then I get socked with a bunch of back taxes and fines and penalties or something, or it's Indian burial land and I'm forced to build a 5-star cemetery on it, and I can't get out of it?
Is this land actually free or worth pennies to anyone looking hard enough to buy it from the state directly?
I suspect the company is really in this for the $400 doc fee.
Specialist · Grand Rapids, MI · Member since 2012 · 583 posts · 353 votes
7y
@Scott K. - depending on what part of New Mexico you're looking in (and who you're buying it from), this number does sound on the cheap end, but I wouldn't say it's unreasonably cheap. I sold a parcel of New Mexico desert land last year and I had it priced a little higher than this - but still in a similar ballpark.
If you're buying it from a land flipper (someone who probably paid closer to $500 when they bought it from another motivated seller), $2,500 would be enough to give them a decent profit and you a great deal. There are a more than a few land flippers in New Mexico - and given the language you shared from their website, I have a feeling that's the kind of seller you're dealing with (and they can be a great source of below-market deals).
As for the pitfalls - it sounds like you already understand the limitations you'll be dealing with (no utilities, very remote, not near any kind of convenience). To some, this could be perceived as a negative, but to others, this is exactly what they want.
As @Wayne Brooks said, if you're really concerned about it, just make sure you're getting title insurance on the property to verify there are no title issues.
BiggerPockets Money Podcast Host · Longmont, CO · Member since 2014 · 7k+ posts · 10k+ votes
7y
I don't do land, so I'm not sure what to recommend. From a residential real estate perspective, can you get title insurance on land? It sounds like you can encumber it, so I'd think you can get title insurance.
A lot of New Mexico is open, so I'd bet there are tons of plots of land available.
I see Wyoming 60 acre ranches for $40,000 on billboards near my house all the time.
Specialist · Grand Rapids, MI · Member since 2012 · 583 posts · 353 votes
7y
@Scott K. - depending on what part of New Mexico you're looking in (and who you're buying it from), this number does sound on the cheap end, but I wouldn't say it's unreasonably cheap. I sold a parcel of New Mexico desert land last year and I had it priced a little higher than this - but still in a similar ballpark.
If you're buying it from a land flipper (someone who probably paid closer to $500 when they bought it from another motivated seller), $2,500 would be enough to give them a decent profit and you a great deal. There are a more than a few land flippers in New Mexico - and given the language you shared from their website, I have a feeling that's the kind of seller you're dealing with (and they can be a great source of below-market deals).
As for the pitfalls - it sounds like you already understand the limitations you'll be dealing with (no utilities, very remote, not near any kind of convenience). To some, this could be perceived as a negative, but to others, this is exactly what they want.
As @Wayne Brooks said, if you're really concerned about it, just make sure you're getting title insurance on the property to verify there are no title issues.
Investor · Thermopolis, WY · Member since 2012 · 4k+ posts · 4k+ votes
7y
@Mindy Jensen, if those are the places I have seen advertised before they are old railroad property broke into lots in the middle of the Red Dessert. Not a very enticing place. They may have value someday, but not today.
I'm looking at buying some vacant land in the southwest, which I've never done before.
I'm surprised to see some of this land sounds pretty cheap, like $2,500 for 10 acres in the wastelands of New Mexico for example. It's just land, no utilities. My use of it would be to camp on it with my RV and maybe do some rock hounding and prospecting. Some day, maybe I'll build a home on it with several RV pads with full hook-ups to rent out.
But for $2,500 for 10 acres and maybe just $20 per year in property taxes, I'm wondering what's the catch.
The company selling lots like these from NM to AZ to NV, charges a $400 doc fee and says this on their website:
"What kind of deed will I receive? You will a receive a special warranty deed, which means the seller is guaranteeing the property wasn’t encumbered during the time of his/her ownership."
OK, so what are the pitfalls of buying land like this?
Is this some kind of scam like I buy the land and then I get socked with a bunch of back taxes and fines and penalties or something, or it's Indian burial land and I'm forced to build a 5-star cemetery on it, and I can't get out of it?
Is this land actually free or worth pennies to anyone looking hard enough to buy it from the state directly?
I suspect the company is really in this for the $400 doc fee.
I was deeded 80 acres in Eastern Oregon for services rendered and later sold for $29,000. I learned a couple of things:
1. Can you get a Title report for the property (I could and did)
2. Can you locate your parcel lot lines. I bought a super duper handheld GPS for the trip and found the disks laid down in the 1800's
3. Do you have water rights (I did)
4. Do you have mineral rights (I did)
5. Do you have access rights (Oregon is an "access state" so a neighbor can't land lock you in and must provide access.
6. Is there a muslim terrorist group practicing their AK47's & explosives in the next parcel (Mine was) true story and kinda scary
7. Are there any trees (Not many on mine, so I planted some)
8. Can you get there in the daylight (I couldn't, too far to travel)
But, it was beautiful country and we marveled that you lose sight of people at 40 acres.
Summary: The group had bought land in Eastern Oregon
"The Portland Seven was a group of American Muslims from the Portland, Oregon area arrested in October 2002 as part of an FBI operation attempting to close down a terrorist cell. The seven were attempting to join Al Qaeda forces in their fight against the United States military and coalition forces in Afghanistan. Their indictment included charges of conspiracy to levy war against the United States, conspiracy to provide material support and resources to al Qaeda, conspiracy to contribute services to al Qaeda and the Taliban, conspiracy to possess and discharge firearms in furtherance of crimes of violence, possessing firearms in furtherance of crimes of violence and money laundering.VideoVideo: 2008 Documentary that examines the case of Patrice Lumumba Ford. Ford is from Portland,Or and was a dubbed ringleader of the Portland 7 terror cell shortly after the passing of the…"
@Mindy Jensen, if those are the places I have seen advertised before they are old railroad property broke into lots in the middle of the Red Dessert. Not a very enticing place. They may have value someday, but not today.
Specialist · Portland, OR · Member since 2010 · 3k+ posts · 1k+ votes
7y
@Scott K the big problem is paying for a survey. Chances are the property is hard to locate and how would you know where your lines are. Best to ask a local RE agent. They probably know why it is so cheap. Many people get tired of paying the taxes and let it go to the county. You can check the tax assessors office-they will give you the scoop. Lots of fraud here.
Flipper/Rehabber · York, UK · Member since 2013 · 895 posts · 453 votes
7y
@Scott K. I'll buy the parcel next door and park my camper there. As most have said, just hire a title company or attorney to run a title search. Seeing the history of ownership will give good clues as to how likely it will be that someone's great, great uncle will show up claiming the land or not.
