Transcription
Buying land looks easy, until one problem ruins the entire deal. After buying and selling over 700 parcels of land, I've seen buyers purchase land they can't build on, can't access, and can't use. So, in this video, I'll show you the 11 biggest land buying mistakes and how to avoid them. Let's start with one that almost got me. So, this first mistake turned what looked like a perfect lot into something that was practically useless.
So, I bought a corner lot in a Florida town very close to the beach. There were homes all around, power nearby, paved roads. It was clean, cleared, seemed build-ready. I did see utility lines nearby, but seemed like not a big deal. So, we went ahead and purchased the property. And then we got the drone footage back. We had missed something, which was, I guess, laughably obvious. There were massive transmission lines running through the property, like right through the center of the property. And counties don't allow, for obvious reasons, building under or within 50 ft of transmission lines. So, the entire property, basically unbuildable. So, here's the lesson. Satellite images can be misleading. Seems obvious, but walk the property. If you can't, get drone footage or have someone you know go out and take photographs. If you don't know anyone in the area, you can always hire a photographer on Craigslist to go out for you. It only costs about $200.
But, here's another thing. Just because you can drive to the property doesn't mean you have the legal right to. Dirt roads are tricky, guys, and they have tricked me many times as well. There are countless properties out there that have road access. Maybe it's a dirt two-track, maybe it's a full-on dirt road, maybe it's a a neighbor's road, maybe it's an old ranch road. There are tons of roads out there that are roads on the ground, but not roads on paper. And just because everybody uses it doesn't mean that you actually have the right to. And I know this sounds technical, but it's super important because this has real consequences. In fact, it's one of the most important things you have to check for. Because if you don't actually have legal right to use that property, even if your neighbor has always allowed you to use it, at some point that neighbor could move and the new person could go ahead and block the road and there's nothing you can do about it.
So, there are three ways to check for legal access. First, call the county planning department and ask, is the road fronting the property a public road? Does the property have legal access? If you have a public road, you're good. If not, and the county doesn't know about legal access, pull up the last plat in the chain of title. The county assessor or the county planning department should be able to give you the plat book and page for that. What you're looking for in the plat is a road drawn on the map. So, it just looks like two lines showing a road. If you can't find a plat, then check through the chain of title. Look for reference to the right to use a road in the deed or for a separate stand-alone easement. Because physical access gets you there, legal access actually protects you.
But now, here's a secret you might not know. Some of the most beautiful land in the US is completely unbuildable. Why? Well, wetlands is often actually considered protected waters of the United States, just like a river or a lake. Imagine that, right? And you cannot build on a wetland. But here's the crazy part. Wetlands aren't always obvious. They don't always look like swamps or rivers. Some can look dry for all but one month of the year. Sometimes you're looking at a desert property, dry as a bone, but during the monsoon season you have a massive flood running through it. And sometimes you have land that's just, you know, little bit squishy. Water is a little bit close to the surface, but you wouldn't guess that it was anything special. But if you miss those tricky wetlands, the consequences can be extreme. It can mean no building, expensive medication, delays, environmental restrictions, and if you ever do get to build on the property, it can mean lots of flooding.
So, the first thing you should do whenever you look at a property is always check the wetlands mapper. But, remember, the wetlands mapper is not 100% accurate. So, if you go out and walk the property and you see something that seems, you know, a little bit suspiciously soggy or sinks a little bit when you walk on it, you might want to consider a wetlands delineation because sometimes those wetlands will pop up in the most unexpected places. And once you own the property, the problem becomes yours.
But, speaking of water, let's talk about flooding. You may have heard of special hazard flood zones or flood zones before. Have you heard of floodways? This is something that trips up many people. Flood zone and floodway don't mean the same thing. Here is the key difference. Flood zones can still be buildable. You might have to elevate, you might have to get flood insurance, but homes are built in special hazard flood zones every day. Floodway is an overflow path. It is where FEMA believes a river or waterway is going to flood at regular point parts of the year. FEMA almost considers it an extension of the waterway. So, that means heavy development restrictions. No building, no permits, massive insurance problems. So, when you see a floodway, think big red flag. Fortunately, there's a very easy way to check for it. Just go to the FEMA flood map service center, pull up your property. If it has an address, use that. If not, use a nearby address, and check what kind of flood zone designation it has. There is a layer for floodway, as well.
Now, point number five is one that surprises people because the property can look absolutely perfect. So, I was once looking at a parcel that was absolutely gorgeous, large, wooded, surrounded by nature, perfect cabin spot, hunting spot, recreational property. For anyone buying it, it seemed like a real gem to add to your portfolio. And I almost missed the hidden restrictions on it. So, here's the thing. This property had a conservation easement on it. And what did that mean? No building, no tree clearing, no subdivision, no farming. This was land that was supposed to be wild forever. But for the right buyer, this could be great. Actually, if you're already a landowner, a conservation easement might not be a bad idea. You can get tons of tax breaks for doing it. That's the topic of a separate video. But if you are purchasing land and you want to use it for anything other than recreation, you definitely want to check for conservation easements. In fact, check for conservation easements no matter what because they affect the value of the property.
Now, mistake number six is assuming that zoning allows your plan. Now, perhaps you are like one of the many buyers that I talk to every day. Maybe you are retired and living full-time in an RV. Maybe you want a tiny home because it's only you and your dog and you just want a little corner, somewhere that you can call your own that isn't too expensive. Or maybe you are just looking for a property to camp. All of those uses that I just listed are often restricted by zoning. And here's the important thing to remember. Just because you go out and walk the neighborhood and you see other people doing what you want to do, doesn't mean it's actually allowed. Zoning can change, so maybe 20 years ago mobile homes were allowed and now they aren't. And sometimes people just do things and they're allowed to get away with it for years until that one day where someone complains and then they're hit with tons and tons of fines or even a demolition order. You don't want that to be you. So, please, please, please, always call the county planning department and go over your specific plan with the county because they are the final authority when it comes to what you can do with the property.
Now, mistake number seven can cost you money before you even touch the property. Remember how I talked about zoning and how certain things are not allowed on properties? Well, say you use the property in the wrong way, and I've seen all kinds of things. People dumping tons of tires on a property, a structure that has been left to rot and looks like it's going to fall down at any minute. Grass that is 4 ft tall. All of these things are illegal, and the county has the right to tell you to remove them or otherwise clean up the issue. And here's what a lot of people don't know. If you get these notices of violations and you just ignore them, at some point the county can go in and correct the issue themselves, as in like tear down your home, cut the grass, remove the tires. And they're not going to do that for free. The cost that they incur to clean up your property will become a bill that is attached as a lien to the property itself. So, what that means for you as a land buyer is if you pick up a property that has some of these old unpaid liens on them, you will now be responsible for them. They transfer with the property. And even though you had nothing to do with it, if you then go to try and sell the property, the title company is going to flag this, and that will likely mean that you will be required to pay them in order to sell the property. But, here's the crazy part. A lot of the time these liens and code violations don't even show up on public record. Doesn't mean they don't exist though. So, before you buy any property, especially if you knew that at one point there was a home on it, call the local county or city code enforcement officer and ask if there are any code violations, demolition liens, or cleanup liens on the property. And if possible, request a municipal lien report.
Mistake number eight. A cheap property is not automatically a good deal. And by this I mean something different than you might think. Say you were looking for land in Florida and you found a quarter of an acre for about 11k. If anyone knows prices in Florida, you know that sounds like a great deal. But here's the thing, before you get super excited about it, go back and check other listings because it's possible that even something that looks like a great deal on paper is not that great compared to what else is out there. So, use Zillow sold listings. Check acreage, terrain, road access, utilities, location. Do a spot check. Make sure that the price makes sense to the comps nearby because buying land without comps isn't investing, it's guessing.
Mistake number nine, and this is one I see all the time. A lot of buyers automatically assume HOAs are either good or bad. Kind of like political parties, you fall in one camp or the other and you're stuck there. But reality is often more complicated. Now, of these two camps, I would say in my experience I found most people fall into the HOA bad camp. And there's good reason for that. HOAs do come with extra restrictions. You usually can't use an RV, tiny homes are almost never allowed, mobile homes are almost never allowed, sometimes there are rental restrictions so you can't build an investment property. A lot of the time there are building design rules so you won't be able to build exactly what you want. And HOAs can often come with those surprise fees that always annoy people. So, there is a good reason to be cautious around HOAs. But consider this as well. When looking specifically at rural vacant land, remember that largely unrestricted land means that you can do whatever you want. It also means that your neighbors can do whatever they want. So, I have seen countless properties that have tons of tires on them, tons of dumping, junkyards, you name it. I have even seen desert lots with what you might call Breaking Bad activities going on. Most people don't necessarily want to be living next to that. And that's not all. Here's something else that I have seen many first-time land buyers forget or not consider. When dealing with rural properties, a lot of the time the county doesn't maintain the roads. In fact, in a lot of these areas HOAs were first created to solve the road issue because roads can get really, really dicey really fast. And I don't just mean like it's a little bit of a bumpy ride to get to the property. I mean like there's a stream that cuts through a road with no way to cross. So, for some people, additional restrictions are worth it for the sense of security, for the amenities, for the ability to actually build a home in an area that is out in the middle of nature in a quieter, more peaceful location.
Now, mistake number 10 is one that I knew nothing about when I started buying land, but it can quietly destroy your ability to build. So, here's the thing. A lot of rural land requires a septic system. But here's something that many land buyers don't know. There is a way to feel out the soil before spending money on a perc test. There's something called a cap score. So, a cap score is primarily used to evaluate the agricultural potential of land, but it is a useful tool for thinking about whether a perc test might pass or not on a property. And here's the thing that is a little bit counterintuitive. The lower number is better. So, a score of one to four is generally a good sign for a septic system, and five to seven, a bit of a red flag. This is just a rough estimate. It doesn't mean that five to seven score is an automatic no, but if you're tight on money, it's a good way to evaluate whether it's worth putting money into a perc test or not. The other thing you can do is pull up the property in the USGS Web Soil Survey. There is a field in the soil survey called septic tank absorption fields, and it gives you a rating from slightly limited, which would actually mean soil that is generally very good for a septic system, down to severely limited. And that is a good estimation on how likely a property might be to pass a perc test.
And mistake number 11. Here's something that actually came up for me just recently. I bought a property in a small town, infill lot, in a residential neighborhood, looked like a great building lot, utilities nearby, lots of homes in the area. But there was one major thing I didn't realize. The property is in a historic district. Now, a historic district is an area that a county has designated as a neighborhood that has importance from a historical standpoint. So, they're trying to preserve the original buildings that have existed in that neighborhood. What does that mean for you as a buyer? Well, there might be limitations on demolition. For new construction, there are going to be certain regulations on what the building can look like. It needs to match the overall character of the neighborhood. So, that means you're restricted to certain exterior materials, certain roof type, paint colors, windows, setbacks, home design, all of that. So, what could happen is you think you're buying a simple infill lot to build your dream home or a standard, you know, modest modular home. And then you find out that your design gets rejected, that construction costs are going to increase, and that approvals will take months. So, suddenly your cheap project has become much more expensive.
So, now you know what can destroy a land deal. But, what if you want to buy land without spending tens of thousands or even hundreds of thousands of dollars? That's exactly what I'll show you next in this video on how to buy land cheap and easy.