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cheap land Archives - Page 2 of 7 - Frontier Properties USA

An Investors perspective: Land versus Houses

By: Mark Podolsky | May 9, 2012

 People always ask me why I don’t focus more on buying and flipping homes rather than buying and flipping land?   For me, the answer is simple. In order to buy a good home for a flip,  you have to find a home that already has equity. So you work the  short sale markets, foreclosure auctions, REO deals from your bank or the for sale by owner advertisements all in the hopes of finding that special deal.   Let’s say  you get lucky and find a home that actually has equity in it and you were able to secure it from all the other professional investors in your area (and that is a big accomplishment).   Now, you have to do the exhaustive analysis. How much is going to cost to improve the house? Do you need to replace the appliances? Are you in a neighborhood that would require granite countertops?   Will you have to improve the landscaping? Is the cabinetry old?  Typically, the best investment / improvement in a home for flipping is going to be in the kitchen and bathrooms. If you aren’t set up to make these improvements yourself, you’re going to have to find a few contractors to help you. And of course you know what they say good help is hard to find… After you have priced out the improvements now you have to hire a realtor to help you market and sell your property within the comps. If you bought right, and you did your financial analysis correctly after the realtors fees, title fees and improvements hopefully there is enough of a profit to make this labor-intensive venture worth your while.

Now let’s compare this to buying and flipping land.  First, you have to buy the property at the right price just like a house.  However, since there are fewer professional land flippers there is an enormous opportunity to find deal after deal and typically it’s just as simple as sending offers to out of state owners whom owe back taxes.  Voila!  You have a deal.  That was quick!  Now, you don’t have any maintenance issues, no worries about a past tenant damaging your land or any other headaches… It’s just raw land.  You can choose to improve it inexpensively by hiring a surveyor and marking the boundaries or fencing the property.  Plus, inexpensive land is just that, inexpensive.  You don’t have to worry about bank financing, and all the other fees associated with buying a house.  

Now, you can inexpensively market the property yourself online via Craigslist, eBay classifieds and other free online avenues to drive traffic to your listing.  Since the property is relatively inexpensive you also have a larger pool of buyers to choose from as you aren’t hampered by a neighborhood, school district or a home owners association that will limit your pool of house buyers.  As  a result, I can make a strong argument your return on your land investment will be less time consuming, take less financial analysis and make you a better return on investment with less inherent risk.  

Let me know if you think I’m delusional.

By the way, learn how to avoid the 3 Fatal Land Buying Mistakes I see land investors make everyday.  

No Country For Old Men- A Land Investor’s Perspective

By: Mark Podolsky | April 21, 2012

I just watched for the 3rd time the Oscar award-winning movie No Country For Old Men.   The first time I watched the movie I have to be honest I didn’t really “get it.”   it was beautifully done and the cinematography of the raw desolate West Texas land was amazing.  The story had violence, unpredictability  and a crazy ending. Nevertheless, after watching it  I didn’t immediately think this is going to win best picture of the year! However,  watching it again I could appreciate the message. The key theme throughout the movie was we can never predict when the grim reaper is going to get us! Plus,  the things that we worry about in life are usually not the things we should worry about.  

The movie kind of just sits with you. After watching, I had that gnawing feeling that even though I don’t feel like today is the day I’m going to die, it could be the day I’m going to die and I’m not really that prepared for it!    Unfortunately,  we don’t get to control or choose when or how we are going to die. I think we can all agree that in 99% of the suicide cases it’s a tragic case of someone taking a temporary problem and coming up with a permanent solution. Now there are some circumstances when one has a terminal, debilitating disease that choosing how to die actually makes a lot of sense. In fact, my Wife and I have a living will so that we cannot be kept artificially alive just so our children don’t have to make that tough decision for us.   So the question is, if this is a blog about buying and selling land  why am i discussing the morbid and often ignored subject of death?

As a landowner,  I want to leave  something permanent for my family for generations to come. If i leave them money,  they will spend it. If i leave them “stuff”, it will either complicate their life trying to maintain that stuff or the stuff will eventually become obsolete or simply wear out.   The only thing in my life that is going to last  is the raw land that I have acquired.   My land has beautiful views, fresh air and symbolizes to my family a core value– we are here for but a short time so take risks, be extraordinary and own something that will last forever!  Don’t sell this land my children, use it, improve it, enjoy it, but don’t sell it!  It will out live you and your children and their children and it is the one possession that you can be proud to own!  I really hope my kids listen to me!  

Are you making this mistake?

By: Mark Podolsky | April 20, 2012

 

One of the biggest mistakes I see online investors making everyday is not doing enough research on the property they are investing in!  One of the biggest mistakes they make is going out and not seeing the property for themselves. It’s a big critical mistake. Don’t misunderstand, there’s nothing wrong with buying property online site unseen. I have done it.  However, I go on Google Earth and I look at it virtually!  Still, I don’t close the deal until someone physically goes and checks on that property for me.

So how do I do it? There’s a great site out there called wegolook.com. WeGoLook.com starts at only $49.00!

Send someone else to go look at your property if you are unable to do it yourself.  Or, you can always take ask a local realtor.  Give the realtor a call and say, “Hey, I am buying this property – have you seen it?” If not, ask them to go take a look for you and you’ll gladly pay them for their time about $50-$100 to take a few pictures for you, assess the terrain, make sure there aren’t any topographical issues with the property, poor access or in a dangerous area.  

If no one can go look at it, make sure there’s a guarantee. I always offer a 90-day addition due-diligence on my property so that people can go, plan a trip, make sure that they really love the property they are buying.

Nobody wants to be disappointed in a land purchase, and as a seller, you never want that either!

Why I Never Buy Land with Restrictions

By: Mark Podolsky | April 19, 2012

Hardly a day goes by when I don’t receive either an e-mail or a telephone call asking me, “Are there any restrictions on this property?” And then they always ask, “Is there a time limit to build?”   Most if not all rural land buyers don’t want an outside entity telling them how to build, what to build and when to build. If you are a legacy investor, just knowing you have a place to go in the country to get away from it all is good enough for you until you are ready to build your 2nd home or relocate on your rural parcel for retirement.

I once made the mistake of acquiring property that had real high property owners Association fees with ponds of restrictions. You had to build a stick home, it had to be a certain size and you had to build within 2 years. Needless to say, even though I became enamored with the subdivision and its beauty, I was naïve to think my land investors would be interested in this type of property.

 When you review my land listings there will be one recurring theme — none of my parcels have restrictions or a time limit to build!   They may be in different areas, have different zoning requirements and have different topographical elements.   However,  they won’t have any onerous restrictions and certainly there will not be a time limit to build!  

Why the tech industry is making many landowners wealthy

By: Mark Podolsky | February 22, 2012

If you read the attached article, you can see why I’m bullish on owning rural land that some people would deem in the middle of nowhere. These inexpensive rural parcels make ideal investments for the tech community to house their data centers. Every time we do a Google search or save a document in the “cloud”  there is a computer server storing this information. As a result, these data centers are becoming larger  and more complex. However, due to their size and the fact that they’re just housing servers to tech companies they only need large cheap acreage to house these huge data centers. How would you like to have been the owner of the parcel Apple computer just bought in Crook Oregon!

 

Is All Cheap Land Flawed?

By: Mark Podolsky | February 9, 2012

Land is one tricky commodity to acquire.   It’s not like buying a house where you can readily see the neighborhood comps and see what the typical house in that neighborhood sells for on a per square foot basis.  As a result, our brains when we don’t have enough information quickly filters value and quality by price.   However,  the attributes of each individual parcel of land can vary greatly not just in the area, but even in the same subdivision. For example, the soil and well depth in one area of the subdivision can be completely different from another area of the same subdivision. Thus, the property that has the higher price must have the superior attributes than another parcel in the same area or so our thinking would go.  

As an example, I just spoke with a seller today about her 20 acres of land in Lassen County  California. She was listing her property for $14,000 even though her neighbor was selling their property for $69,000. I asked her why would her land be so much less expensive than the adjoining parcel? She said the adjoining parcel had power, and a well. Power and water  already on the land makes it much more valuable than undeveloped acreage!  Yet, without digging deeper it was difficult for me to assess if the $14,000 for 20 acres was reasonably priced, a screaming deal or a big mistake.  

My next call was to the County assessor.  I wanted to find out the last 5 comparable sales in that area. That would at least give me a better idea of the price even though it was impossible for me to determine if the other properties were improved with power and water or unimproved. Nevertheless, I always find getting a price range in an area helpful.   Unfortunately, the prices were so random that it was impossible for me to see any type of pattern in that area. Plus, there weren’t enough sales in that Township Section and Range to know if this was a comparable sale or not.   Therefore,  my next call was to the local water drilling company.  The driller stated that it would cost $48 drilled and cased per foot and $800 for a 20 foot sanitary well seal and then $146 for the County water well permit.  So on average he said that in this area he would have to drill about 100-150 feet.  So the total cost would be about $5600 for a 100 foot well that would pump 15-20 gallons per minute which is really good.    I then figured if I went the solar route in this area it would cost about $10k-$12k for power.

Now I had my rough numbers.   I figured $14,000 for the land plus $7500 for a well just to be conservative,  then another $12,000 for my solar power solution. So the total price to have a comparable piece of property to my potential neighbor would have been $33,500.  Based on my rough numbers and the fact I had $34,500 in potential profit to play with, it would be worthwhile to continue investigating this property.  

Obviously, as I’ve discussed before, the property would have to be compelling to me and hopefully another buyer/investor. If I had simply looked at the $14,000 price for 20 acres and listened to my gut which immediately said, “This seems too cheap to be any good”  I may have missed out on an unbelievable opportunity. Perhaps the seller was desperate? Or, they inherited the property and had no idea what the value of the property was. As always, you have to do your due diligence to determine if land that seems at first blush is really cheap is flawed or an excellent opportunity!

 If you find a piece of land that you think may be too good to be true, shoot me an e-mail and for a small consulting fee, I can help you with your due diligence and walk you through the process so the next time you locate property you won’t just dismiss cheap land as being flawed. 

Are you buying in a flood zone?

By: Mark Podolsky | February 8, 2012

Investing in raw land over the last 11 years has taught me some hard lessons. The 1st lesson, is not to trust the tax assessors database. However, I always thought that I could trust the flood designation. Unfortunately, with FEMA changing the flood designations on an annual basis this is not the case. With FEMA constantly changing the flood hazard maps, a property that may have been designated outside of a floodplain a few years ago may now actually be located within a hazardous boundary.

 So what can you do about this?  

Buying a property in a high-risk flood zone could mean additional expenses including a flood survey as well as ongoing flood insurance.  In addition to this, it could make the home more difficult to sell at some point in the future as a result of this designation (not to mention the expense and headache associated with a flooded property).  Flood insurance alone can be anywhere from a few hundred dollars a year all the way up to a few thousand a year, depending on the flood zone category. The bottom line is any property purchase should be made with full knowledge and awareness of the property’s flood zone designation.

Going forward, we have implemented a policy in my office to run official flood certifications on any new properties we put under contract. Rather than rely on our local tax database or even some of the free flood zone sites online (which we have also found to be inaccurate), we have partnered with local lenders to run this for us . We also have an insurance agent that can run flood certs as well.  Most investors have a good relationship with either an insurance agent or loan officer that would be willing to help in this area – don’t be afraid to utilize these relationships for this valuable information.

As an aside, if you do discover that a property you have purchased is in a flood plain, consider carefully what kind of flood insurance coverage you want. It may be that your lender requires flood insurance, but doesn’t necessarily dictate how much coverage you need. If this is the case and you feel confident that the property won’t flood, you may be able to elect to cover only the building (not contents), insure for a lesser dollar amount, or carry a higher deductible. In doing so, you can lessen the impact that flood insurance has on your cash flow by obtaining a policy with a smaller yearly premium.

For more information on the National Flood Insurance Program, check out the official government website at FloodSmart.gov. But even more importantly, make sure you have the ability to determine the flood zone of a property before you buy it. The last thing a real estate investor wants is a property with unexpected risk and expenses cutting into future profit.

How I Leverage Technology To Get More Deals Done

By: Mark Podolsky | January 26, 2012

Being a land geek has its advantages. I have been able to leverage technology to be able to get twice as much done to focus on deals and not be bogged down by paperwork, mailings and flying on planes to research land.

We are in the Golden age of real estate investing. It used to be a slow and arduous process to get a deal done just because of all the due diligence and paperwork involved.  Today, using technology I have found five great web sites and services to allow me to focus on what is going to make me money… Closing deals.

The first website I utilize on an almost daily basis is www.docusign.com. Whether you are a realtor or real estate investor, docusign is an invaluable resource when you have to get your customers to sign on the line that is dotted. What used to take several days in document preparation, regular mail or FedEx and their associated costs I can now do in a matter of minutes.  Plus, the future of computing is mobile phones and tablets. Docusign allows me to view, sign and edit my  documents on the iPad, iPhone or an Android phone. Plus, the monthly fee is small compared to the monthly FedEx fees I had to incur in sending my contract out to my various customers throughout the country.  The turnaround time is instant and the dream of a paperless office is now a reality with services like Docusign.com.

the 2nd website I find invaluable is a map making site www.expertgps.com. Oftentimes, I used to have to rely on a professional surveyor to create a map for me to show my online customers the GPS coordinates of the property,  the driving directions to that property and the topographic features of that parcel. Instead of paying a surveyor over $100 an hour to prepare these complex maps  I now utilize a $200 software program named www.expertGPS.com.   by simply typing in the Township Section and Range of a property, expert GPS will create a map for me.  It works in conjunction with Google Earth and I can then manipulate that map several ways to show my customer the driving directions, the GPS coordinates as well as the topographic features of the property. What used to cost money and time in map making now literally can be prepared in minutes. In fact,  I have created a 3 part video series for my land geek coaching clients to teach them how to create these maps online using expert GPS.com in conjunction with Google Earth.

Another great time-saving website I have found is www.simplecertifiedmail.com.  When need to get someone’s attention, a great way to do that is to send them certified mail. Unfortunately, when my note clients are late on their payments I find that certified mail is an effective way to get their attention in order for my note payment to become a priority. However, it’s a pain  to have to drive to the Post Office,  stand in line, and then hand write a certified mail label. For a small fee, simplecertified mail.com allows me to print by certified mail postage online and they provide the certified mail envelopes and I can even track when my recipient receives their certified letter. This wonderful online service saves me time and gas not to mention the frustration of waiting in long Post Office lines!   If time is money, then you really owe it to yourself to check out www.simplecertifiedmail.com.

The fourth time saving website I have found extremely useful for my due diligence is a new service called www.wegolook.com.     I always tell people never acquire property sight unseen. Yet, I often have to buy property sight unseen because even using Google Earth and all the tech tools at my disposal nothing replaces a human being going out and stomping on the property. However, to save me time and money and allow me to do deals throughout the country I utilize the people at www.wegolook.com to go and find the property, take pictures for me and basically do a phase 1 inspection of the property. If the people at www.wegolook.com can’t find the property, then most likely my potential buyers won’t either and that is a good indication that no matter how fantastic the deal looks I should pass on it.   Plus, the service is ridiculously inexpensive starting at only $49.

The last service I use is like a de facto escrow company for me. When dealing with inexpensive raw land, sometimes I will simply do a title search on my own and save the money using the title company and an escrow service. The way I do this is utilizing a company online named www.notarypro.com.   For example,  I send an offer letter to a potential seller whom then accepts the offer.   Using expertGPS.com and Google Earth as well as wegolook.com I thoroughly research the property and discover that it’s a fantastic buy. So to close the deal, I send all of the documents to the notary, they set up a time with my seller whom then signs over the property to my company.  The notary notarizes their signature, gives the seller a cashiers check and then sends back all the documents to me. As a result, I save money on escrow fees and my seller gets a quick close.  Moreover,  I have a faster turnaround time as well with all of the paperwork. I have found this way of closing deals safe, effective and my sellers love it.

Have I missed an excellent website?   Please leave me a comment on how you use technology to either research transactions, close transactions or just save time and money.

 

 

What drives you to be a land baron?

By: Mark Podolsky | January 6, 2012

So, what drives you to be a land baron? When I first started acquiring land it was a means for me to get out of a dead-end job. My wife thought I was crazy and I didn’t care. I knew that the worst-case was I would own land. Even if I couldn’t sell it, or make a profit on it I had something that was more important to me than any other possessions that I owned. If everything went to hell in a handbasket in my life I knew in my gut that here was something I owned that I could escape to with my family.  The romantic notion of  living off the land like the early settlers appealed to my inner explorer.  I think most of my investors are looking for camping property or property where they can go around exploring the surrounding areas and it’s not just a cold calculated investment for them like a stock or mutual fund. I think for some investors the reason they want to become a land owner is it represents an escape for them should society ever really break down (hopefully, that never happens.)I think some  land investors really want to get back to a simpler way of life in the opens space of unadulterated clean air and views. When visiting my Nevada property I was taken aback by the quiet along the back drop of mountain views. The pride of ownership of going to bed every night knowing that I own 40 acres in a pristine part of the world just puts a smile on my face.So, shoot me a line and let me know what motivates you to be a land baron.   I’d really like to know.

Buy What you Know

By: Mark Podolsky | October 17, 2011

It’s become a cliché, but it really applies to land investing.  Invest in what you know or buy in your backyard.  Basically, if you live in Texas don’t start your first land purchase in California.  Look first in your own neighborhood.  You know the busy streets and the good corners.  You intuitively know the path of growth.  Relationships are already in place even if you aren’t aware of them as inevitably you’ll discover a friend of a friend whom can help you with your land goals.   You won’t have to travel 3 hours to go to a planning and zoning meeting.  You’ll know the key real estate attorneys and title companies to work with in your area and if you don’t your friends most likely will have an excellent referral for you.  The benefits of investing in your own neighborhood despite better investing conditions in other areas out weigh any other negatives.   I read online about how there are great buys in Florida & Nevada for housing, but I know my local market so much better.  Why get sidetracked and compete with the local experts?  Warren Buffet famously never invests in technology companies simply because he doesn’t understand them.  He’s best friends with Bill Gates, but has never put a dime into Microsoft.   This type of self-discipline with investing strategy should be applied to your land investing.  You are the local expert in your area even if you don’t realize it.

 

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