First land flip done, all cash, ten acres, nothing interesting happened

Posting the beginner version because I think people newer than me want to see one where nobody got clever.

I sent letters to owners of vacant rural parcels who were behind on taxes in one county. A woman called back about 10 acres her mother had left her. Wooded, frontage on a gravel county road that gets plowed, no structures, no water feature, nothing special. She owed two years of taxes and lived 600 miles away.

I paid $6,300. Costs on the way in: $450 closing at a local title office, $350 to a local real estate attorney to prepare the deed, and $260 to clear the back taxes. Marketing was $180 for a photographer with a drone and $50 to list on a land site, plus free posts in three local groups.

Asked $14,900. Got a full price offer in nine days from a guy who then vanished. Second buyer took 63 days total and paid $13,750 cash. He wanted a survey, which I had not done, so we split it, $700 my half.

Net a little over $6,200 on about $7,600 out, roughly two and a half months, cash to cash.

The part that almost went wrong was the deed. I nearly used a template I found online to save the $350. The attorney caught that the legal description on the tax bill was an abbreviated version and did not match the description in her mother's deed. That takes ten minutes for someone who does it every week and would have taken me a week and a wrong answer.

What I keep: buy where the road is maintained, pay a local attorney to do the deed, and take a lower cash price over a higher one that needs financing I would have to provide.

Answer

1kevin_lombardPG1BPRO5

I am going to write this back as steps because that is how I learn, and orchard can correct me.

One, pick one county and mail owners of vacant parcels who are behind on taxes, because owing money on land you have never seen makes people want it gone. Two, before offering, confirm the road is maintained year round, since that is what decides whether normal buyers can reach it. Three, buy at a price low enough that the back taxes and closing costs still leave room, which here meant $6,300 on something that sold for $13,750. Four, pay a local attorney to prepare the deed and check the legal description against the recorded one instead of the tax bill. Five, spend a little on real photos. Six, expect a buyer to fall through and expect a survey request, and hold enough cash to cover the survey half.

The thing I would add for myself is confirming access is by frontage rather than an easement, because the other thread here had someone spend $2,650 fixing an easement that did not match the traveled road.

orchard, is the $350 attorney fee typical, or does deed prep vary a lot by county? And did you verify anything about the mother's estate before closing, or did the title office handle that?

6 replies

2dmitri_v6CapitalPRO6

The abbreviated legal description on the tax bill is a trap I have seen described more than once. Assessor descriptions are for billing, not conveyance, and in some counties they are decades out of date relative to the recorded plat. $350 for a deed prepared by someone who reads that county's records daily is the cheapest thing in your post.

1renee_dubois Get yours

You left money on the table by not offering terms and I still think you made the right call for a first deal. Terms means your $7,600 is tied up for years and you learn servicing, default handling and tax escrow all at once with no reps. Cash out at 63 days teaches you sourcing, which is the part you actually needed.

1laurenkim53Passive

What did the letters cost you all in, and how many did you send to get her call? That ratio is the number I cannot find anywhere for the low price point end.

1nataliehsuSO1BPRO7

First buyer vanishing after a full price offer at nine days is the detail I want more on. Was there earnest money? What stops that from happening three times in a row and turning your 63 days into 200?

3gregpowell66AG4BPRO8

No structures, no clearing, no permits. From the construction side this reads like the only version of real estate where nothing can go wrong on site, which I assume is wrong but it is nice to imagine.