I bought my first piece of land in a tax auction, how to develop?r

[Austin Snyder]

Hello all,

I have previous experience with real estate, but first timer with both raw land and tax auctions in Texas and I'm realizing now just how little I know when it comes to land. I'm hoping I can get some tips or pointers from anybody with experience in land development or buying land off tax auctions. The property I bought is about 7,200 sqft in a gated subdivision near a lake/boat slip with many other plots of land nearby that are around the same size. Houses built in the area are in the $1-2 million range. 

The extent of the research I did was that I saw the previous owner bought the land in 2007 for $37,500 and I bought it for $7,000 cash. I know bare minimum I could turn around after the redemption period and just sell it for a higher amount. However, I don't know if there's been soil tests, building plans, I don't know if there's utilities in place underground, if it's in an HOA, etc..

My question was this, to save time and money, is there a place I would be able to see if a previous soil test has been done, building plans, anything? Would the county have record of that, or a 3rd party website maybe? Should I try to get in contact with the previous owner? Any suggestions are greatly appreciated as I'm hoping to buy a lot more property through tax auctions but I'm a young padawan with much to learn on this strategy.

P.S. Also open to any recommended resources or people who are knowledgeable on Texas tax auctions. Thanks so much in advance!

[Jay Hinrichs]

Quote from @Bryant Brislin:

You can always try check with the city's planning or building & safety departments to see if they have any type of file related to the parcel, and if they do, if there is any due diligence in the file, i.e. soils, etc. It's usually pretty hard to try to piggyback off of what a previous owner may have done in the past. If the previous owner lost the property in a tax sale, they may not be dying to help the next guy who got it for a very low price. Also, some people essentially abandon their properties to the tax collector, because there is some type of flaw with the site, i.e. access, utilities, etc. If it's within an HOA, call the HOA's property management company and ask them if they know any of the history of the lot and if they see any constraints to building it and what steps it would take with them to build on it in conformance with their CC&R's. Another option is to find a good local architect, civil engineer, or similiar third party consultant to take a look at it and let you know their thoughts on the viability of developing it. As far as you saying you don't know if it's in an HOA, it likely is, given how you described it and that shouldn't be hard for you to figure out just by looking at a Google Earth map (sometimes the name of the community will appear), or pay a local person off Craigslist to go drive it and find out the community name, take pictures of the lot, etc. Also, if it's in an HOA, you need to find out the dues so that they don't put a lien for nonpayment.

the risk in a situation like this is the lot is not buildable for various reasons and the owners just let it go to tax's.. the time to find all this out what before you bid.  

if it was mine here is what I would do.

1. walk in to planning department in the county and check zoning and any red flags they may have.

2. should be simple enough to see if it has public water and sewer then call those agencies to make sure there are no moratoriums.  basically get a will serve letter.

3. HOA for back fee's if any and see if they have any violations .. HOA could be active might not be but if your in an area of 1 to 2 mil houses I have to think its active.

4. Building department where you would bring in building plans to get approved see if they have anything identified as being a red flag to that parcel.. ( its a small parcel so unless something is really weird there should not be anything..  )  Unless its a remainder parcel and the size is not big enough to legally build on  that happens in tax sales.

Lastly area of 1 mil to 2 mil homes and you bought it for 7k.. my first hunch is something is potentially really wrong with it.. normally lots in those types of areas would sell well north of 100k if your building 1 to 2 mil homes.. thats how the math generally works to back into land values.