You've got to go out and walk the property, understand what you have
there, make sure that the property's not in a flood zone.
What's up, guys?
In this video I'm going to discuss with you, 12 common pitfalls,
and mistakes that can derail your raw land investing.
I'll cover everything from understanding
the fundamentals of raw land investing, performing due diligence and implementing
some of the best practices to ensure your investment can remain profitable.
And more importantly, it'll be sustainable for the long term.
All right.
So what is the first issue that comes up that's critical
You need to be aware of? It's road access and maintenance, making sure
that the property that you're considering buying that it has access.
So there's a road there and who's going to maintain it, especially if
if it's another piece of property, you want to look into that
and make sure you nail that down before you take title this property
because there's a lot of responsibilities can come up with road maintenance.
Maybe your property is the one required to maintain the entire road.
So check into that.
Secondly, you have to look at is land locked properties and this comes up a lot
when people are buying on land.
You don't want to get involved in a deal where the property itself is
not accessible, that there isn't an easement across your property, or
you're going to have to invest a ton of money to push a road through.
I've had situations for with clients who bought property only to find out
it was land locked and they couldn't access the property
without going to court, forcing the other party to allow them access
to enforce an easement that they had in the deed to their property.
But it came at significant cost.
Another thing is that if you don't have an easement
to access the property, then you have to go
possibly buy an easement by prescription, which means more additional fees
to convince a court that you need to have access to this property.
If you don't have access to it,
most of the time you want to walk away from that deal.
Okay.
The third issue that comes up is going to be zoning or rezoning.
You know, if you're buying the property, what do you intend to use it for?
You need to know how that property is zoned
to make sure it meets your investment.
Criteres you because you have to go and reason the property.
Is that even a potential for you depending on the area
which is where that property is located.
So knowing the zoning requirements is a must.
Now, number four, this is critical as well.
It's called a site visit.
You've got to go out and walk the property, understand what you have there,
because you've got to see where the maybe the property floods all the time.
Which brings me to my next point.
Make sure that the property is not in a flood zone.
So this could create potential problems with you developing the property
if you have flood issues there
and it can get really expensive if you're not aware of that.
So flooding and zoning are two very critical aspects of this.
So six thing you want to look at is the get the property surveyed to
discover whether or not you have any timber rights.
All right. To the property.
You know what can happen sometimes with real estate
is that you see the land, but you don't own the timber
that's on the land because that was given to someone else in the original deed
or mineral rights to what's underneath the land, know what's available.
So the seventh issue
is going to be subdividing that land, knowing what you can do with it.
Maybe you're buying that property
and you think you can put three or four homes on it,
but in the restrictions on that particular property,
the way it zoned, you could only have two homes on that.
So knowing the the regulations and zoning is critical
to make sure that your development's going to work out properly.
Now, the eighth thing is utilities, of course,
and whether or not you have connections that are already there
at the property itself or you've you have to bring those in.
Listen, if the property parks, you've already got electricity there
and you've got cell phone, Internet and all that to the property, great.
That's going to be a good investment. But you have to bring all that in.
That can be quite taxing.
Which brings me to number nine, which is taxation.
It's a great idea to know what's going to happen.
That property when you purchase it, maybe it has a certain designation
now for taxes, but when the property is sold,
those taxes could skyrocket on you because it's been grandfathered in.
So you want to make sure you're researching what the taxes are associated
with that land after it's going to be sold.
Now, something else I would look at is if you intend to use that property
or are you going to sit on it for a while?
You want to use it for other uses, look at campsite, land or glamping
discovered whether or not it has that potential to generate income for you.
I've got a great video on my site.
You can check out the link below right down here that talks about
how you can make money from leasing out your property
to glamping or putting your own camper on there.
Number 11, if you're buying raw land,
look for land that has some type of existing structure on there.
Because many times
when it comes back to zoning, if you already have an existing structure,
it makes that process of permitting that much easier
because rather than starting from scratch, what you end up doing is you're saying
you're remodeling something that's already existing.
It doesn't matter if that structure is completely dilapidated, it's
still your way in to get your permitting done that much quicker.
This brings me to my last point.
When it comes to buying raw land, never buy it in your own name.
You always want to take title in an entity that limits your liability exposure.
Because, let's face it, if people go out on your property
and they injure themselves, they're going to hold you liable.
People are hunting out there and they shoot someone.
You're going to be liable for that.
If you're buying property and you don't see and you don't walk it,
you don't follow all these tips right here.
That can be a real problem
because you don't know what undiscovered defects
that may be there and how many people are using that property.
It can bring liability back to you.
So make sure you use an entity like an LLC to buy your property.
If you want to learn more about raw land investing
and how to set it up with limited liability companies or land trusts
or corporations in the tax side of raw land investing,
I'd like to invite you to our Free Tax and Asset Protection Live event.
There's a link in the show notes below. You can click on that.
You can join me and my partner,
Toby Mathis, as we go into details about LLC and corporations
and all of those different strategies, plus the tax side of investing.
And more importantly, we're going to have a team of our attorneys and CPAs on
that will get your individual questions answered.
Look forward to see you there, guys.