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Learning, Sharing, and Teaching => Real Estate and Landlording => Topic started by: WhoopWhoop on May 07, 2014, 07:26:01 PM

Title: Raw land - buying from tax deed sales to re-sell
Post by: WhoopWhoop on May 07, 2014, 07:26:01 PM
I'm wondering if anyone on these forums has experience buying and selling raw/undeveloped/vacant land and re-selling for profit (presumably less than a year after buying).

I've run across a couple people online who talk about buying land really cheap at tax deed sales, then re-selling it at or below market price on landwatch or other common places where people sell land. Ideally, you'd sell to someone who owns the neighboring lot.

I like the idea, and I imagine there's a lot less competition when it comes to buying raw land (as opposed to buying houses). But, I don't know anyone who sells land regularly or anyone who has tried this strategy.

Do any mustachians have experience with this? What has your experience taught you?
Title: Re: Raw land - buying from tax deed sales to re-sell
Post by: Pherman on May 07, 2014, 10:20:41 PM

New Mustachian here - I have experience with tax deed sales in FL (exact laws/procedures differ by state) but understand the process well and have participated in several auctions.  Also, worked in entitlements/acquisitions & development for one of the big public homebuilders for years and my educational background is all real estate & construction related.

There are a lot of nuances with the tax deed sales that need to be understood prior to purchasing a property.  It's not impossible, nor does it take a nonsense paid course, seminar, etc. to gain an understanding.  If you're really interested, go attend an auction without any plan to purchase - no matter how good of a "deal" something might seem.  There are 'pros' at the auctions and people manipulate them constantly - here in FL, I've even seen investors pay homeless people to go in and bid high to temporarily get a specific property out of the lineup - called 'burning' an auction.  The property receives a winning bid but the winner never shows and the property gets rolled to next auction or one after that (dirty state I live in).  Anyways...

Not sure how well versed you are already but here are some key things to learn and check on for your state... read, read, read.  It's not as easy as the late night infomercials make it sound but it can be great. 

Tax Deed vs. Tax Lien Certificate - know and understand the differences. 

Is there an owner 'redemption' period and what is the timeframe - in FL (Broward County) - generally no.  In FL, the mortgagee is wiped out which is HUGE but if you win, you could also be picking up back/prior tax liability on the property.

Tax Deed vs Warranty Deed - tax deeds generally aren't warrantable from a title company and require a 'quiet title action' to clear the title and make it marketable. 

Understand land use, zoning requirements, easements, etc. - I've seen parcels/properties in S. Florida that are fully encumbered by wetland easements, utility easements or literally be a parceled 1 acre 'property' in the middle of an existing 5 acre lake. 

Does the property have water use rights - big in CO and the surrounding states

Is it accessible?  Not referring to physical roads but right of way access - can you get to the property or is it 'land locked' by other properties that you don't own.  When land was booming, clowns were buying 1 acre parcels in no man's land west Texas that had no legal access. 

Hope this helps to get you started/going. 

A proud new Mustachian. 

Title: Re: Raw land - buying from tax deed sales to re-sell
Post by: WhoopWhoop on May 08, 2014, 08:34:57 AM

Hope this helps to get you started/going. 

Very very helpful. What little information I could find, I did notice there are quite a few things that can go wrong and that you have to double check when purchasing raw land.

Are there any books or online resources that you recommend for learning about purchasing undeveloped land? I've had trouble finding a good source of info, as most real estate advice pertains to purchasing homes, not undeveloped land. (Of course, you and others who have done this before are great resources, but I like to learn by reading first so I don't bore you with basic questions)

Another big question: What works for you when it comes to selling the land? In your experience, is it hard to sell raw land?
Title: Re: Raw land - buying from tax deed sales to re-sell
Post by: xfactor9600 on May 13, 2014, 07:41:58 PM
I'd be interested in any recommended reading as well... thanks for your input so far.