All Forum Posts by: Karl James

@Ashley Pitre

I'd be glad to share with my small bit of experience (I've only done about 10 land deals in the 9 months since I actually started buying anything.). As for good ways to gain knowledge in this space, go listen to Bigger Podcast #39.  It is with @Seth Williams - he has the heart of a teacher, he is quite active on this set and he has a site www.retipster.com that has just about anything anyone could want to know about land investing.  If you are looking for a relatively straightforward any inexpensive start to finish guide - join his retipster Club.  It is a very sryctured walk through of how to start and successfully execute this land business thing.  Also, the Club site has a forum where folks who are actually doing land deals (and pretty much just land) help each other out.

Recognizing it might cost Seth some revenue I will tell you (and he would, too). 99% of what is in the course to which you can subscribe, is available for free on his retipster site.  Two bigger differences, the course has taken his blog articles and has organized the information relative to land in a start to finish, step by step basis.  

Now back to the "can I help you" thing....

Question  #1 - if for some reason you don't recognize going in, this thing is a bad deal and you can't resell it for more than you have in it, or sell it at al, can you afford to be out the $8k and pay the annual property taxes if you needed to hold it for quite a while because it won't sell?   (I find it hard to believe 61 acres can't be resold for quite a bit more than $8k)

Question #2 - is the land vacant; I.e. No houses or at least no occupied house?  Or said better, have you been able to confirm it falls within the 6 mos redemption rules rather than the 24 months?  My guess is if the county owns it, it is probably not a homestead for the purpose of redemption period.   The county or their law firm could probably tell you if you call them.  The reason I ask is that unless the redemption period has expired, the former owner has the right to reimburse you the costs you paid plus 25% and reclaim the proprty. According to @Arnie Abrahams, a very experienced TX tax sale investor, 95% of the time that never happens (closer to never for land).   If it has an occupied home, it might be a hassle to do much with it.

Q3 - Are you ok holding it for 6 mos while the reception period runs?  You may not have to hold it that long because the redemption period likely started when it was stuck off.  If you know the struck off date you may be able to determine how long, if any time remains.

Q4 - What is the tax assessed value of the property and of the properties around it? While that doesn't reflect market value, it can give you a good indication of a ball park?

Q5 - do you know a realtor in the area?  Regardless, you can reach out to one and ask them a couple questions.   I approach it something like this... I have the opportunity to buy a unlisted property (describe it) that I would I tend to resell.  I haven't decided if I would sell it myself or list it with an agent.  For tax reasons, I would need to hold it for a while.  Would you be willing to provide me with your assessment of what the property might sell for if I was looking for a cash sale and wanted to sell it with 90 days of listing it.  Also, can you provide any comparable a sales in the last year or comparable listing?  You can do this before you buy.

Q5 have you tried looking at local realtor sites for land listings in the area to get a feel for comps?  Also try Realtor.com,  Redfin and / or HAR.com (the later may not extend coverage that far out of Houston).

Q6 - have you drive by to see the land yourself.  Most of the time it doesn't look as good in person as on Google earth.  Doesn't mean it's not a great deal.  I drive by everything I've bought so far - if I can get to it.

Q7 - have you verified you are buying 100% of the interest in the land.  The county CAD site probably shows the ownership % or you can call the county with the property number and ask.

Personally, after doing all / most of the above. I would probably by it.

Let me know if I can help.  Good luck.

@Ashley Pitre

I have found investing in vacant land to be a much more conservative approach than properties with houses - little doubt about the redemption period on those.  But, it can be harder to find buyers and almost impossible to find anyone to lease land.  

With respect to our candidate property - $8 k for 61 acres seems cheap.  Maybe too cheap.  It would probably be a good idea to check comparable so listing / sales if you can find any.  Perhaps even do a drive by - that almost always look less attractive in person than they do on Google earth.  Also, the fact that a 61 acre parcel is struck off -meaning no one was willing to buy it at one or more auctions could signal a bit of a concern.  

Of you are successful,at buying it at that price, what do you plan on doing with it?  If you intend to flip it, do you have a feel for potential buyers?  

Be sure the interest being sold is a 100% interest and not some partial undivided interest.

So, after all that cautionary stuff - if you done your due diligence and you can afford to risk $8k,  I wish you well.  It could be a great money maker!

Karl

@Melissa Rich

Hi.  I have been investing in Re for a very short while after a number of years of interest.  So far, I've only invested in the SW Houston area.  But, I have a son starting at Baylor this fall and have considered looking at investing options in that area.  I'd be interested in hearing more about your thoughts for investing there.

Karl 

@Justin Tahilramani - I got the 2 acres for a very small amount of cash from an out of state owner that owed some back taxes.  The previous owner inherited the property and didn't want it so they ignored paying the taxes and never took the imitative to try to sell it.  I bought it just before it was going to a sheriffs sale for the taxes.  So, my question wasn't tied a bank loan, etc.  or even access / easement.  The immediate area where it lies is undeveloped and doesn't currently have roads; but, it does have platted, county owned street rights of way through it, including one road easement that runs right in front of my property.  It is property ripe for development.

My question was this:  If a developer were to develop an area of and, say 100 acres - what is typically the ratio of the value of the raw land pre-development compared to the cost for a developer to put in streets, utilities, etc.

In the picture below, the outlined property is mine.  See those small home site lots in the development on the East, South, and West side of that new elementary school - those are about 0.2 acres and selling for about $20k each or $100k / acre.   So, I am wanting to value my 2 acres based on those.  If the price of the developed lots reflects - for example - 50% cost to develop, 25% profit and 25% cost attributed to the raw land value, then I'd ascribe a value of $25k / acre to undeveloped land.  $25k / acre x 2.07 acres = about $50k estimated market value for my parcel.

The above ratio (50% / 255 / 25%) is just made up.  I was hoping folks lie yourself with some insight and experience in the world of residential development might be able to provide real-life ratios.

Thanks for repaying.  I apologize for not providing more details in my original post / question.

Karl

I am trying to estimate the market value of a 2 acre, land locked parcel of land.  It is in the midst of a 20+ acre undeveloped area that is bound on two sides by nice residential developments ( 3 bedroom / 3 bath) brick homes where there is a good deal of new construction activity. I can easily get good comps for the vacant, ready to build, lots in these developments.  But there is not recent sales or listings of undeveloped raw parcels nearby.

Does anyone have thoughts on a decent factor to apply to developed parcels to estimated undeveloped land value?  For example,  if a vacant ready to build 1/4 acre lot is worth $25k or $100k per acre, is undeveloped land nearby that is prime for development worth 10% of the post-development land value? Or more, less?

The land is in the growing southwest Houston, TX area.  Any developers or others on BP with ideas of guesstimates or rules of thumb to interpolate?

Thanks,

Karl

@Harry Asnien

As others have stated, land locked properties can be a real gem if you can do the research on the neighbors.  Can you lock up the property for 30 to 60 with a relatively low cost an option?   Then you could aggressively market to the neighbors.  If they bite, you could then go through with the purchase and either wholesale it to neighbor or or buy and resell.  If nothing works out, let the owner keep the option premium and you go to the next deal. 

My best deal so far (sold for 5x my cost)  was a 4.7 acre land locked vacant property sold to a neighbor.

@Joshua Small

All of the above posts are good feedback. Once you have spent some time reading / researching broadly, I recommend you narrow down your focus to one (or a few) niches. For example, flipping house, SFR rental, etc. Once you have one or two in mind - then use the search feature to find blogs or threads specific to that type of investing. After spending some time in forums related to that niche, reach out to those who, based on their posts or help given others, appear to be more experienced - reach out to them with questions. I also suggest seeing if you can find folks who have recently (last year) started investing in that niche (based on their posts) and reach out to them about their learning / what helped / worked etc.

Don't forget to use the key word alerts feature of BP once you narrow down your focus.

You might search BP for "meet ups" in your area and attend one to make local contacts.

I hope these ideas help.

Karl

Ditto the previous comment related multiple heirs with different objectives. These often take longer to negotiate and can turn interesting during title search if all the heirs cannot be located, or worse if one or more have died. Just be patient - sometimes a good deal can be had.

@Michael Hayworth I can't agree more w/r/t building the relationship with the title company, and perhaps one step further, the closer (or whole team) within the office.

@Brian Burke

 @Jay Hinrichs

@Dr. Scott Benjamin

Thank you guys for the input.  Brian - great body if information.  Thanks for the time you spent to put it together and post.

Karl