My 1st post and question on purchasing neighbor's vacant land

[Patricia Persico]

I'm new to Bigger Pockets, and hope to learn a lot here. I scanned through all the forum topics, to see if I could find something that will help me figure out how to approach the owners of the vacant land next to a home I'm purchasing, for my own use.

I'm on a fixed income, so money is tight, but I want to get into investing, and get to the point where I have something worthwhile to leave as an inheritance for my children and their families. I didn't set out with a plan to buy this home, but it just happened. I started out looking for land, since many advertisers claim they'll do a seller carry, no credit check, and I could easily afford to do that. But, when I found out how much it costs to have electricity, and other utilities brought in to the land, I ventured into looking for cheap homes around that cost, and found one. Obviously a fixer. So, it will be a fun hobby.  Then, in a couple years or so, sell it, and do another.

The home I bought, sits way back on the neighbors property line, leaving a very small backyard patio area, and a large front yard.  The lot in back of my home is vacant land, as well as the one next door. I'd like to pick up either one of these lots to be able to expand what we want to do with the house.

Both owners live in other states, and through many online searching found they're age 63 & older, with kids that now have families of their own too.  These owners have owned the land since records began with the county, in the 80's, showing unknown dates prior. But they've always been in the family.  The neighbor next door, is an attorney, in California, and the one behind us, looks to be a Real Estate investor in Seattle.  Both sound like it would be hard for me to convince I'd like to buy there land, which has all utilities running to it, that they most likely want to leave as an inheritance to their kids, who may like the idea of having land, or a home, within an hour of Las Vegas, NV.  So, I don't want to talk myself out of asking either of them, if they'd consider selling, but it sure seems I'm finding this difficult on how to ask and have them work with me.

I found lots of topics on buying homes here, through BP, but this is bare land.  The home I'm buying has $25K equity already built in, per the lender's appraisal, but any money I do have, is going to fix up this home so it will be worth even more, and look a lot better too.  I just don't have the money to buy land, unless it's a seller carry.

Any suggestions on how I can approach the neighboring land owners to see if I can somehow buy their land they've never built on?  I found phone #'s for each, through googling, but it's their business lines.

[John Becker]

Melissa is right on although I would temper one thing. Forget about explaining your situation and just send a friendly letter saying you are a new neighbor and just wondering if they have any interest in selling their land. The follow-up letter(s) are a good idea too because it may take them time to respond but once they do, then you can get into more detail if appropriate.

The fact that they are out of state is a good thing too. The next thing you should check is the Treasurer or tax collectors website for the county or city the properties are in. If they are delinquent in paying their property taxes then that's a good sign that they may be motivated to sell. This is where you should also be able to find the owner names and addresses

Next you will want to do some due diligence and determine the value of each property. I am in the vacant land business and here's what I typically do. Call the county or city Recorder, whomever holds the deeds where you live,  and verify who owns the property, if there is a mortgage or not and what kind of deed they have (warranty is best). They may also have a plat map or survey for the property. 

Next, call the county or city Assessor or go on their website where they should have a "property search" function. Enter in the parcel number or name on the deed and see what information they provide you such as assessed value, last sale, size, zoning, etc.

You could also call the Planning & Zoning or Building Dept. and see what the allowable uses are for that property's zoning designation. They would also be able to tell you about any future plans for the area.

Then, as far as price or value, you might ask the Assessor what their formula is for assessed value vs. market value as a starting point. Then hit the internet to check listings. Try the biggies, Zillow/Trulia and Realtor for agent listed properties and then the many other websites like Landwatch for FSBO lots. This will give you an idea what similar property sellers are hoping to get in the area.

Then, to get a true approximation of value, find a real estate agent who will search the MLS for actual sales. These are prices an actual buyer has paid and if there is enough data you will see what the market currently is. The Assessor may also have this information - maybe even on their website as some do now.

If the sellers are truly motivated (not paying taxes and out-of-state) you may be able to get their property for 10 cents on the dollar. Regardless, you want to leave lots of room between what the market will bear and what you pay to insulate you against unknowns. And last but not least, understand your exit strategy before you do anything and it will guide you along the way. 

For more in-depth discussion on all this and much more I would refer you to Seth Williams excellent blog and website, retipster.com.