So I have a raw land deal to wholesale. It is 17 acres of undeveloped land in a small rural area outside of Birmingham, AL. This particular property is land locked. The surrounding properties were all family owned and eventually they all became bank owned. The property in front of the property I have to wholesale has an abandoned house on it and that house's driveway used to be how the property owner accessed their property. That property is now bank owned.
I have no idea how to market this property. I have a couple of questions.
1.) How do I determine the value of this property? There are certainly no similar comps around.
2.) Do the sellers need to get an easement to the property in order to have access to it or is that something the buyer would be responsible for?
I think the only buyers you could potentially find would be the homeowners of the surrounding attached properties.
If I were you, I would look into buying the property from the bank and making those 17 acre valuable, by establishing an easement (if there's enough road frontage).
Without that, I don't see much value, unless you get one of the connecting homeowners to give you official access/easement
From looking at property records it looks like Fannie Mae owns the property in the front. Any advice on buying a property back form them?
Mrs. Tiffany, reaching out to you on facebook, since we are facebook friends. Glad to see another U of A grad on biggerpockets.
And I would also check out the local laws for grandfathering of an easement (that isn't on paper, but that had been used for some years). So, if it looks as if the Fannie Mae property had tire tracks going to your lot, then maybe there's some verbal agreement with the previous owners, that Fannie Mae doesn't know about?
Anyway, see if it looks if any of the attached properties seemed to have granted access to this land or if it was really landlocked.
@TiffanyRouse I'm looking at a similar situation. Wooded 18A in Missouri landlocked. The realtor isn't being helpful about finding an easement but she did say the deed "speaks of one" but they don't know where it is. I don't exactly know what that means, as I'm new to this.
Anyway they've listed it for 18k and the assessor's appraised value is 1.7k! I hope the recorder's office will be helpful in finding the easement and once I know that for sure I'll make them a very low offer because they aren't helping with the ingress situation.
What other resources or offices should I contact to 1. Find the exact easement or 2. Create an easement?
I really like the property as far as it natural characteris tics such as a seasonal stream, south facing slope, pond possibilities
Does it have any merchantable timber on the property?
@John Oberlin I work in power development and we do access and transmission/gas agreements with landowners all the time. We have a boilerplate easement agreement that we're comfortable with, but we usually get local counsel (we work all over the country) to look it over and tweak it to the local laws if necessary. Then we engage the landowner and negotiate the price/yearly fee, whatever they want. Sometimes they have their own counsel look it over as well and then we hash it out. They usually want to see a map of their property with the easement clearly shown and sometimes dimensions labelled and whatnot. Be sure you know if they have other easement agreements for access, power, gas, etc. that might affect yours. It's a pretty straightforward document that I imagine you can find a basic one available online or go to a local attorney and ask them to draw one up for you. If the landowner is neighborly, they may agree to the easement for a nominal fee, like $1 (this never happens in our business!), or just ask that you mow it for them or something, but it would be good to have it in writing either way. You'll probably have to be proactive on this as rural counties tend to have pretty rickety property records so you'll either have to ask someone at the local assessor's office to dig through file folders or hope the landowner kept good records which it doesn't sound like. We use title companies to find this stuff out as well. Good luck!
Thanks @Garrison Householder. I spoke with the recorder's office there and she said yea it's going to take hours to locate that easement if there even is one. She suggested doing a new easement deed. I'll try to go down that road and cost it then go back to the realtor with an offer.
@Tony Gunter I'm not sure how to assess it's timber value right now, but hope to learn as I'm interested in acreage. Do you have any reading or resources on that?. On Bing and Google maps, particularly Bing, seems like there's young deciduous trees. And it seems like there's some trees laying down. Up the hill you can see some logging action. I'll try to link the sat pic.
How do you @somebody?
Here are two images. I love the watershed area that drains to this property. it's all wooded, but I'm not sure where to start on assessing the timber value.
Sorry, I spent 4 years at Clemson learning that. It is not something that is easily done on a DIY basis. There is a real method to it if you want to get it right. You also have to know your different forest products specifications and the local markets for the products.
I can see the old skid trails in the aerial photo. I can see plenty of them running across the photo. Looks like maybe running toward the dirt road in the left side of the photo. Probably Hardwood Pulpwood regrowth at best. I would not count on any real value. When talking about timber fat, clear, tall logs before the first branches is what adds up to real money. I doubt that is the case here. Never sure without actually walking the property though, just judging from the photo. Also, looking at the topo map you have some area that will not be able to be developed. The stream will need an SMZ (stream side management zone) left on it, and it would be difficult to gain any permanent access to the other side of the stream. As you said though, good potential for a pond. Just do your permitting as you can get in big trouble with the State regulators and the US Army Corps of Engineers too.
easement by necessity
I play with timber at times
@Red Brown "easement by necessity" I'm not familiar with the term. Is that related to the statute like in MO that a property cannot be landlocked legally, according to the recorder I spoke with yesterday.
Thanks @Tony Gunter I found the USACE stie for permits. Good future resource with a digital library. And yea, I'd definitely leave the SMZ, or riparian strip. If I were to log it and or develop it, I'd apply permaculture and keyline scale methods
I would talk to @Seth Williams because he's a wiz at raw land evaluation.
It sounds like you're getting some decent tips here @John Oberlin . Regarding the easement by necessity, this isn't necessarily a "legal right" in all municipalities. I've tried to play this card a few times and was always met with a hard and fast "No" from local counsel and county offices in the places I've worked (not saying it's impossible, but I would definitely research this before you sink any money into anything).
To find out about the easement, you could order up a title commitment (which costs nothing until you close the deal) and then hand the title work off to a surveyor. Depending on the surveyor and the property, this would cost at least a few hundred dollars - maybe more... but if both parties are doing their job right, this would tell you if there's an easement and if so, where it is.
I've bought and sold a number of landlocked properties and in my experience, the primary benefit is in the fact that you have a lot of negotiating power on the front end. When a vacant lot has no road access, you're basically willing to take on a "useless" property, you can get these properties for VERY cheap (I've been able to get some really nice 5+ acre properties for just a couple hundred bucks on more than one occasion, and sell them for thousands on the back end).
On the selling end, it obviously helps if you can prove the existence of an easement (definitely shoot for this if you can), but it's not always a necessity. If you buy it cheap enough, some people will still be willing to pay enough to give you a decent profit... the trick is to market it well and be patient enough to find the right buyer, because not all people value properties the same way (Person B may be willing to pay 5x more for the same property than Person A - pricing raw land definitely ISN'T an exact science).
@Seth Williams I intend to call up a resource in that county to check into the easement and get an estimate of how much it'd cost to draw up a new easement, if the adjoining owner would agree.
I just recently ran across your BP podcast and website. Thanks for the info. I'm starting my search in my home county in Ohio. The county has some developing res areas. And the GIS service has some great GIS map layers, such as 2-year delinquency and vacant residential.
In your podcast interview, you said you might offer an owner 10-15% of the land's value. Would you be basing that off of the county appraised value (not tax assessment value) or the previous sale price? Or do you just develop a feel for the area and the market?
@John Oberlin - your question about land value is well warranted, because this number can be very difficult to define. A lot of professional appraisers have difficulty in this area too - because there is usually a severe lack of data to work with in most markets.
The county's valuation can certainly be used as a starting point, but it's almost never "spot on" and their number by itself isn't enough to draw any final conclusions (remember, these guys earn more tax revenue for properties that are assessed higher... little bit of bias here). The recent sale price can be helpful to know as well, but even this can fluctuate wildly based on the economy at the time of the transaction, and what the seller had in mind when they bought it.
Ultimately, I think there are several factors that need to be considered. To get an accurate read on this, it's usually going to take at least a little bit of digging. You can check out the whole process I go through right here: http://retipster.com/valueofland/
Hope it helps.
It is hard to get to talk other neighbors who still alive , but still trying , the only option is there is another small 0.64 acre can give me easement and utilities , that parcel was separated from mine long time ago because they were under same owner and recorded as different lot . that owner is dead and the land under LLC. was owned by him , so that exit parcel has a 5 years of delinquent taxes and the county gave it to one of its law firms to sell which not happening in the near future or do not know when .
My parcel is zoned residential(6.4 acres) and after long argument with the very tough county planning department people they said if i purchase the exit 0.64 acres , they will allow me to develop the land for the part that is develop-able. after i extend the road , water and sewer to it .
My interest is to flip the land now and make a little profit on it because i am not willing to wait until GOD knows ,
My question is if i want to have an easement through the parcel that is going to the tax auction which caused my land lock but does not have an owner now , can i do that through court ??
anybody can help me with ideas on how to do that , or how to have an easement to it if i have to develop it myself ??
please help me
Updated over 2 years ago
Hello All I have a landlocked parcel in VA surrounded by some old homes and 3 other neighbors, one of them is a church who own around 30 acres , who been bargaining with me to make me lose money on it for a very cheap price less that what i bought it for , the whole area is under development from the county (Hanover county , VA ) , which makes their land worth a lot and want to take mine to gain more , but do not even want to give me money on it .
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing