One of the things I love about real estate is the storys. Now my old man knows how to make money in the stock market. He has done so many times and is constantly good at it. When he talks about stock investing I listen and for good reason. With that said he called me the other day with a land deal he wanted me to invest in and man is this deal No Bueno. It’s 50 acres in a sleepy town in Western South Carolina with non mature trees on it. First he has a quarter stake in the property and its been listed with a agent. Well that’s my first big red flag. He tells me the agent had a buyer lined up for 100,000 but he’s trying to find a way out and keep his 1000 EMD. Like any call I get I ask questions in a direction looking for motivation or distress. Well the other party’s have good jobs he tells me and the only one that might need the money is a missionary that lives in God knows where. Can you say red flag! But it gets better, there is a land dispute with a adjoining property but he reassures me no big problem. Now his idea is to put down 50k and we can sell the land together for a 50k profit. All I need to do is drop 25k on this deal. :deal :rolleyes I tell him thanks but no.
Moral of the story is that don’t mix family and business and understand whats a deal!
Also I really need to start getting some land deals going because people really don’t have a good grasp on what’s a deal… I think Craigslist might just be a goldmine for that.
Did you ask him what the history of the property from the land registry office is? I bet there’s something like sold at tax sale for $6,000 six years ago and now they want to flip it for a $100K. I see those all the time. Everybody thinks tax sale properties are automatic winning lottery tickets. Usually tax sale properties are serious money pits and that’s why the previous owner couldn’t sell it and just walked away. I saw a property not too long ago that required public roads, town water and sewage lines to be build anything on it. I called town hall and septic tanks were not allowed and there was no subsidy or plan for the town to build services out there and if I wanted to build anything on it, a smalll fortune needed to come out of my pocket. As I suspected, the land registry office’s title history showed the seller bought it at tax sale and now wants 20x what he paid for it. Not only that, the town clerk said the real estate agent lied to me about being able to put a shed on it or store anything on it. Absolutely useless property. Absolute insanity on the seller’s part.
Whenever I hear large acreages like 50 acres for sale in sleepy towns, the first thing I wonder is why it isn’t rented out to the neighbors as farmland, cattle grazing land or something else? Where’s the apple trees or corn stalks? Is it built near a landfill or toxic waste site? Who buys large chunks of land and doesn’t use it for anything to make an income off of it? That’s the biggest red flag of them all. You’re very smart to stay away from it.