10 Tips for Buying Land

10 tips for buying land so whether you are buying land for your next dream home maybe you are looking to become a land investor you need to watch this video I'm gonna share with you information that you absolutely must know if you're gonna be transacting land hi I'm Phil post I ask you the freedom mentor com this is the number one YouTube channel for real estate investing worldwide and part of the reason is because I share with your wisdom truth signal on the real world of this business information you'll hear nowhere else and I'll be the same with this video as well also I'm the author of a couple of books my first book how to be a real estate investor this has now been read by millions I give you free access to this book right here in this corner of the video also my second book real estate investing gone bad this is more for intermediates and experts and this tells you what not to do in fact I think I got some stories about land buying here in this book so that will help you as well alright let's dive in so with all of the competition out there right now in the house-flipping sector there's a fair number of real estate investors that think the holy grail is to now move into land flipping land investing and then also because the real estate market is so strong there's a lot of people that are just jumping in and buying land as opposed to maybe putting money into the stock market or into buying bonds well I have often heard the comment that land is simpler it is easier than buying a house well the reason for that is they tend to picture the problems with maybe flipping a house whereby you have to deal with an inspection where they can find plumbing problems electrical problems there can be termite damage there can be foundation issues and on and on and on and that's true however land has its own set of issues and usually by the time you're in the world of flipping a house the original developer of that home already overcame all of the land issues and all the land details that we're going to talk about here in this video so no it's not the Holy Grail it's it's own separate set of challenges but yes there's plenty of opportunity and land as well and so I hope with this video this allows you not only to make good decisions but also to negotiate better deals now you're gonna know the ins and outs of landmine tip number one is terrain yes you can look at Google Maps and you can look at the satellite in fact they even have a a terrain filter as well but let me tell you it's not until you actually look at the land that you can see what the terrain really is so for you investors that think you can do it long distance you need to see the land before you buy it I'll give you a good example I own a property in the Smoky Mountains when I was first negotiating the deal I saw her it had 2.8 acres and I thought to myself wow that's kind of a nice little bonus now I was negotiating based on these the log cabin itself but if I hate with the extra - now - 28 acres doesn't hurt well from the satellite view on Google Maps it looked like there was just a bunch of woods behind the log cabin it was until I saw in person that it was a sheer cliff it was two point eight acres basically of cliff which is basically useless alright so sounds simple that's tip number one check out the terrain the only way to really do that is to see that in person tip number two is it cleared land or is it treat so you can see that on Google Maps usually but it may be an older satellite picture so you still want to see it in personally or look at the terrain what you need to be careful of here is when you're negotiating when you're looking to buy the land you need to make sure you understand if the other comps are comparing that that two is cleared land or tree because to clear treed land it's not like it used to be sometimes you'll see where parcels of land will have been cleared fifty a hundred years ago that's what we had a lot less regulations than we do today in Florida for you to cut down a tree that is more than twelve inches in diameter you've got to get comment and then you usually have to plant new trees to compensate for the trees you just cut down and if the trees get too big you all of a sudden have to go before a proven process I don't recently cut down 150 year old oak tree in my town and that was the big to-do I was on the front page of the newspaper and a lot of these citizens were just irate and angry this is a tree so be very careful when you're negotiating and looking at these deals that you understand the difference between clear versus treat - number three you need to know what the land you're looking at has wetlands on it what are wetlands well it is a definition by the Department of Environmental Protection on the vegetation and the land being protected now thankfully there is a tool where you can find this out it's called the wetlands inventory mapper and you can google that I will have a lake up here as well wetlands inventory mapper it's a tool whereby you can search to see where the government thinks there is wetlands on the land and that is so significant for several reasons first of all it makes the land a lot less valuable because now in order for you to do anything you're going to have to make major amends with the government for example in order for you to let's say put a driveway across a wetlands area which by the way it doesn't mean it's wet it doesn't mean that there's a lot of standing water there it could just be the fact there's some maple trees and some other types of vegetation that the government deems is wetlands vegetation there are horror stories of developers who are trying to put together subdivision there's a little you know there's a little wetlands about but the size of a softball and all of a sudden they have to shut down the entire development because of it true stories so wetlands inventory mapper is going to show you where the wetlands are because if you have to cut let's say a driveway across them to get to where you're gonna site put your your dream home for example you're gonna have to pay what's called wetlands mitigation credits and they usually sell them by the 10th of the acre because the value of those right now in the marketplace here in Florida is about $80,000 an acre so for every acre of wetlands you want to develop you have to pay eighty thousand dollars in wetlands mitigation credits in fact there are some developers that make a fortune by becoming a wetlands mitigation credit Bank or what they do is they will buy land and they will work out a contract with the government to improve that land to some degree to help with the wetlands and then the government gives them these credits in return and then of course they sell the credits to private developers so you need to know where your wetlands are this is a big deal right here this can make properties that you thought a homerun let's say you're buying on a tax deed sale and you're investing from afar and you think wow this is the deal of the century you need to look up their weapons because if there are that might be why you're getting that deal the century because the vernacular in land investing is called the land is wet so if that land is wet you got a problem tip number four you need to check to see if any of the land is in a flood zone now this is different from wetlands okay a flood zone is determined by FEMA and in fact FEMA has a map you can use to check to see if any part of the land is in a flood zone and I'll put the link right here but you can also google FEMA flood zone map as well and well the flood zone at least the nice thing is you could maybe dig a pond right there in the flood zone use that filter to maybe raise the land right next to it and that's maybe where you put your house for example whereas wetlands you can't go dig in a pond because it's wetland that's protected but still you need to know where the flood zones are because another issue is floods are very common they've always been common somehow people have gotten the idea that floods are this this rare kind of stroke of a catastrophic event that can happen a lot and they happen all over the place all it has to happen is some rainstorm just get stuck some high pressure and low pressure system they interact they just leave that rain scene in one little area and next thing you know there's a huge flood so that also brings up this point July 31st they're supposed to be either extending the flood insurance system or other such legislation so for you Realtors out there contact your Congress a man or woman and make sure that they're on top of this subject of FEMA and non flood insurance because this could affect people buying a house if you're trying to flip a property and part of it is in a flood zone and in flood insurance can't be issued after July 31st of this year that could kill the deal right there so that's another reason why you know your flood zones are because that could affect you selling the proper get somebody else at some point tip number five is the property have any access to a county maintained road so a lot of land deals are done in rural areas and sometimes that land does not have road access and sometimes it does have road access but the road is a private road not county maintained now this doesn't mean it has to be a paved road it could be a dirt road but it needs to be County maintained because unless you have that county maintained status oftentimes you can't get permits for a septic which means that the land can never have a house on it until it becomes part of the county maintain Road now can you put some cows on there and run some cattle yes or some things you can do with the land but you may not be able to put any sort of primary residence or any sort of residential property on it which can really reduce the value so you need to look at this is very common when people are doing tax liens and tax deed sales sometimes I'll pick up land and it's it's locked and surrounded by other parcels and it has no road access now it might have a driveway but it doesn't have that road access in fact I know an investor who makes a fortune what he does is he just studies the the maps of his local area and he'll pick out a property if I can draw this so here's your county maintain road he'll pick out a property that has a long road frontage and then it say have some parcels back behind it that do not have that county maintain status so he buys this one first and one name and then he goes into an agents help and buys these others and then what he does is he slices this up and he's able to give each one for example access to to some road frontage and it makes each one of these Lots worth much more I mean I've seen him do deals where he picks it up for 400 and he resells all the of individual Lots totaling up to about 900 thousand now make a killing so this little angle alone can be incredibly profitable for you tip number six utilities so are their utilities both power and sewer running along the county maintained Road on the road that it has access to if it doesn't have sewer so long a county maintained access you can probably put in a septic but that still brings in the electric side let me tell you getting electricity to wherever your home site is going to be on that land can be incredibly expensive so if the land already has an old mobile home on it it already has something where the electricity's aren't even run - it has a huge difference I mean we're talking 2050 a hundred thousand dollars the power company can charge to run a line to get to the actual home side where that home is going to be so when land has access to utilities makes a huge difference makes it worth a whole lot more and so I hope you're seen for each one of these tips this is allowing you to negotiate better if you're trying to talk that seller down but it also gives you that confidence when you know that that land has some powerful intrinsic value because it has many of these features in the position you want them in tip number seven how's the cell service so when you're out there looking at the terrain looking at its cleared or if it's tree you're trying to see where the wetlands are if you looked at the map you're kind of checking out the flood zones and you're see if it's kind of maintained you roll and you see where that electricity is running to it next to each ask yourself the question how's my cell phone service because if you're gonna be moving out there and living in that property let me tell you you need to have some good cell service if you don't it makes your life miserable sure you can build a cell tower in fact I have a good friend of mine who builds cell towers in Florida a smaller one runs about $100,000 plus you have to have the power run into it so yes you can build your own cell tower but man that's expensive right if you have bad cell service that can make everything miserable even from you trying to develop the thing and just being out there at the land now what some people look at is well one of my internet options you know can I bring in some sort of cable internet can I do DSL I don't get as concerned about that anymore because services like Verizon allow you to have like a home my five that can be on an unlimited plan so long as Verizon has some decent service that's what I've done in some of my cabins in the Smoky Mountains because I can't get anything else besides satellite internet and that's awful because they they only give you a certain amount of data and then they start charging you afterwards you don't have an unlimited plan which is kind of ridiculous that's you know it's like 1996 kind of stuff right um so I actually care about cell service even as an investor if I'm trying to flip the lane cuz it drives me nuts when I'm out there and my cell does any work kinda renders me useless tip number eight what are the neighbors like and you may not be able to figure this out right away but if you're looking to move into that land at some point in the future you need to study the neighbors they have a big shooting range going on they always shoot and clay pigeons do they have a motocross track do they have a landfill going on about a mile away where the wind could blow and make your house always smell this right here is not as easy because you usually can't figure it out just the first time you show up you'll have to go there a few times in the evening in the morning you'll have to figure it out to see what the neighbors are like go knock on their doors go talk to them find out who they are and say hey look I'm thinking of buying this land I might build my dream home can you tell me what it's like to live here very important I have literally walked away from deals because of all three examples I just gave you clay pigeon shooting motocross track landfill it's for real so you do have to do that kind of due diligence as well tip number nine endangered species this is a very real problem if you're looking to develop that land in any way after you acquire it whether you're gonna put your dream home on there or you have visions of building a subdivision you need to know if there's any endangered species because that can shut you down and shut you down forever so the people that do the wetlands delineation so when you actually go towards using wetlands mitigation credits you first have to get a delineation done by a civil environmental engineer who then brings it to the Water Management District person and then they go out there in person and actually agree on where the wetlands are and they're not it's not just simply the map where the mapper just gives you a relative idea they have to officially score it they call it and so that same person can help you with endangered species so in Florida one of the issues we deal with our gopher tortoises these suckers are everywhere they're all over the place and supposing they're endangered oh but get this they're gonna charge you six thousand dollars all they do is pick them up put them in the back of their pickup go drive them over to some state land drop it off and six G's per turtle true story you know I'm getting of course when some developers do I don't know anyone who would ever do this they put it in their own truck drive them out there but then you got to find the gopher hole and you got to make sure that gets covered up as well make sure you don't cover up a line one they pick up other people I know I've done that before I have no personal experience in that so endangered species you need to figure that out as well if you're gonna be doing a development if you're just flipping land this won't really be an issue right here because by the time you flip it that's somebody else's problem but make sure you don't find out about it you're better off being ignorant of the problem if it is a problem and tip number ten you guessed it zoning yeah zoning is a very very important part of land deals and usually it is County Pacific it can be city specific this is the one that's gonna take you the longest to understand you're gonna have to dig and dig and dig to learn exactly what is allowed and not allowed with zoning of that particular piece of property and the reason why this becomes so difficult is because there's so many shades of gray as well and I don't recommend you ever get into the business of trying to change zoning some people do that it's a nightmare takes several years it doesn't always work out because all the people living in that area vote against it and this that and the other so instead you're looking for properties that already have the correct zoning and not just the underlying zoning there can be zoning overlays that can play a key role as well there can be things that allow you I've done some deals in Daytona that had a zoning overlay that allowed me to do vacation rentals now that of course got pulled aside once the the Hard Rock Marriott Hilton's of the world all moved in the Daytona Beach and got rid of some of my vacation rentals by being able to get in touch with the legislature and remove some of the overlay a loophole that I had discovered anyways get your zoning dialed in and understand exactly what you can and can't do and then learn if there's any overlays that also play a key role another example is you might see a great deal in Florida and you might say wow I could buy 400 acres for $1,000 an acre what a deal yeah there's a lot of those deals in Florida you know those are those are conservation easements or what happened was the landowner sold the land if you will to the government in what's called a conservation easement where they got paid three four thousand dollars an acre and then now basically the government has complete control over the land but yet you still own it you can basically run some cattle on it and that's about it so you've got to really understand the rights or the lack of rights you have of Zoning you've heard me say this in another video if you've ever watched any of my other videos on this topic of owning real estate but in America you don't actually own the real estate you you have your name on the deed but technically the government owns the land if you will and you are renting it from them because they tell you what to do and what you can't do on your land so if you're the type that you're gonna buy some land and your says my land I'm gonna do what I want yeah you'll find out real quick you can't do that so the government has complete control over the land and what you can and can't do and they also charge you whether you what I call rent or taxes on the land and if you don't pay that rent for those taxes they take your land away so you don't own the land you rent it you rat from the government and so you need to be crystal clear on this zoning piece and this typically has the biggest impact on values right whether its own commercial zone industrial zoned agricultural zoned residential and then what layer of that can I mean how many units per acre can you develop with that zoning and all that whew all that stuff so I I wouldn't be able to video like this to go through all the zoning details because they're all specific to your area but if you make sure you check off all of these ten boxes before you buy land you're gonna not only negotiate better deals but you'll make sure you don't make any huge mistakes and also hopefully you can use some of this wisdom to find deals and negotiate good deals and resell them as an example I gave you at the county maintain Road angle where you're able to create some some little parcels that that now have maintained access that didn't have it before all right line fill offs with freedom mentor.com if you got questions and whatnot about my buying land feel free to put them down below here I love answering your great questions and if you want to learn more about how to be a first-class market leading money-making machine real estate investor consider applying to our apprentice program when my team and I work with people every single day and help them in becoming very successful in this business well once again thank you so much for watching this video I look forward to seeing you on the next one

Channel: Phil Pustejovsky

Views: 428,377

Rating: 4.8532052 out of 5

Keywords: Land Investing, Land Buying, Buying Land, Raw Land Investing, Land Investment, Phil Pustejovsky, Freedom Mentor

Id: phv3i1ZmxNs

Length: 20min 20sec (1220 seconds)

Published: Fri Jul 13 2018