Why We Passed on a Cheap Land Deal (And You Should Too Sometimes)

Why We Passed on a Cheap Land Deal (And You Should Too Sometimes)

Contractor · CHARLOTTE, NC · Member since 2019 · 4 posts · 1 vote

Not every land deal is worth doing.

A while back a friend brought us a piece of land in Harrisburg and suggested we buy it.

At first glance it looked like a good opportunity.

But when we started doing our due diligence, we discovered something important the land was not perkable, which meant it couldn’t support a septic system.

In simple terms: it wasn’t buildable.

We told him right away and said we should return the property.

Instead, he suggested we just sell it to someone else since the purchase price was low.

We decided that wasn’t something we were comfortable doing.

So we stepped away from the deal.

He eventually sold the land, and to this day the property keeps moving from one buyer to another.

Unfortunately, situations like this happen more often than people realize.

Land deals can look simple on the surface, but the real work is in the due diligence.

Before we buy any land, we go through extensive checklists sometimes dozens of different items

to make sure we truly understand what we’re buying.

In this business, knowing when not to do a deal can be just as important as knowing when to move forward.

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  • Mechanicsburg, PA · Member since 2013 · 3k+ posts · 2k+ votes
    7mo

    @Yair Dorman We have been a licensed Sewage Enforcement Officer in Pennsylvania, so am very familiar with "perking". Most of the approved systems are either sand mound or inground, however there are many other approved systems including, drip irrigation, small flow treatment, A-B system, spray irrigation, and many others including peat systems.  Some of the systems only require a probe test and no perk. In one area, we purchased 117 lot from 116 different owners, many of which had failed perk tests.  Our success rate on re-perking was better than 99%.  There was one lot that had fill from road widening that we could not get to perk and ended up selling it to the neighbor for expanded side yard. On another almost 100 acre tract, we ended up doing about 100 perk tests; and at another site we did 200 perk tests before getting enough passing perk tests for a lot subdivision.  Depending onthe value of the property, the higher the lot value the more you can spend on both augmenting the soil and the price of the septic system.  One person, I know had a high value lot and ended up grinding up the soil augmenting with vermiculite, then piling it on the surface and waiting 4 years, then re-perking, and then passing the perk test.  It was expensive and lengthy procedure, no doubt. 

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