What is Due Diligence in buying land you ask? Just a fancy way of saying investigate the property. There is a lot to investigate with land so I'll just do the quick and dirty and call it part 1.
First, you want to make sure the property has ingress and egress.
That is, you can legally get to the parcel and out of the parcel.
How do you know? First, call your local surveyor. They have maps
they can quickly access to let you know if there are public roads
you can access to your parcel and if there aren't what your options
are. If while driving out to the parcel you notice you are driving
over other people's property than this is a red flag and you should
probably pass on the investment.
Second, how do you know if you are getting clean and marketable
title from the County or City? Simple, call your local title
company. Most title companies will insure a deed from the local
County or City as the tax sale legally wipes away any liens or
encumbrances from the title. However, there are some states, like
Texas, where the property owner even after losing their property can
get it back after a certain period of time. Title companies won't
insure the title in this situation. The fee for a title search
shouldn't be much. Always negotiate.
Third, contact the County or City Planning & Zoning office and ask
them about any restrictions regarding the parcel. What is the
parcel zoned? Any known issues with building there? If the parcel
can't be built on then your value has greatly decreased and unless
you are a genius marketer I would pass on any parcel that is not
buildable.
Finally, when driving out to the property, look at the topography.
Is the parcel flat to rolling? Is it steep, and if so can it be
graded? If you wouldn't want to live on a side of a cliff neither
will any of your buyers. Never buy property for investment that if
you couldn't sell, you wouldn't be proud to own yourself.
Next time I'll talk more about some other nitty gritty issues like drainage, vegetation, soil, easements and other issues.
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