All Forum Posts by: Chabu Nsokoshi

@Seth Williams thanks for the additions to the list, the info is awesome. And I know this will be very helpful. I just re-listened to your podcast. Now, off to check your blog for more tips. 

Hello BiggerPockets Nation, 

@Joshua Dorkin should address everyone on this site as part of "the BP nation". Like an elite national citizenship of it's own. Anyways, speaking of elites, I'd like to speak more to people investing in land. I have done some research on the process one should do before purchasing their first land investment, and wanted to post it here, publicly for additional input. The list is not extensive and hence why I'm posting it, in hope that someone with more knowledge can have more to add. 

Please add to the comments. 

With no introduction left, here's a quick seven point checklist that a  land investor should investigate before purchasing.  

1. Run a price comparison with similar properties – Just as all real estate, comps are important in making sure you're paying the right price for your investment. You can use Zilliow.com, Landandfarm.com, Trulia.com or ask a broker. To find properties that have sold and are similar to the propter you're interested in. 

2. Explore the Physical land usage – Get a survey done to find out what the exact boundaries of the properties are. In today's world we have the beauty of using tools like (http://earthexplorer.usgs.gov/) or (www.maps.google.com) to get aerial views and topographical maps. You can learn a lot from these maps like historical land patterns, farm practices, and natural land management. 

3. Investigate the Legal Regulations – Visit the city/county office and inquire the zoning verification. Ask for future changes or building projects or developments that are planning to take place in the area. Pro Tip: Search for tax information.

4. Get access to the utilities of the property – Find out who the local utility companies are for septic, sewer, water, electric, and contact them. Any wells on the property or inherited equipment that can be improved or sold? Seek the raw potential that can be improved.

5. Assess the roads to the property – How accessible is the land? how much traffic gets through the roads? Road maintenance or improvements you should know about? 

6. Find out if the land is currently under any HOA's or POA's. Homeowner's association (HOA) and Property owners association (POA) are corporations made by developers for the purpose of enforcing rules for the properties in their community or condominiums. Here's where you can find out what exactly you can do with your land.

7. Confidently resolve title issues – Ensuring the ownership of the property is very important. So closing with a title company should not be negotiable. find out if there's any liens or financial dedications tied to the property. Make sure the seller is the true owner and is selling the property as agreed on.  

And that's it, SEVEN! This list is not exhausted and I invite people to add to the checklist to improve it. Add on to creating wealthy real estate investors. 

Books to read: Buying and Investing in Land by Dianne Ronnow

@Marcus Brown funny you mentioned that story about your friend, because that's how my curiosity in land investing started. My friend is a farmer and pays rent for 300+ acres of land; I think, the owner must be very clever. 

There's so many options for land owners, dairy farms, poultry farms, chicken farms, orchards and vineyards. The idea is that if the economy falls apart, people will always need food. And farmland is just like other properties, you can buy it on a discount and flip it. I'm not too sure about the tax benefits, but i'd assume there great, because you're feeding people. 

Farmland is valued similar to any other business property, mostly off cash-flow in quarters. The land itself is valued by the area, if it is begging to expand or develop. Plus there's specific appraisals/agents that work this niche accurately to tell you the limits on how the land, whether its farmable or best be developed.

@Joshua Dorkin @Brandon Turner @Mindy Jensen @Scott Trench biggerpockets should have a separate Land forum, where we can talk crazy about farms and dirt land.  

@Jeremy Kloter Thanks for the tip on finding buyers. I don't know much about farming, but willing to learn. I think land invest is a great idea even though its a small space  

Hello Everybody, 

Thanks for taking time to read my post. I have much to say and even more questions to ask. I'm curious about rural farmland investing. I've done research on the topic, but I still come shot of fully understanding the picture. That said, I'm no expert on the topic, but would love to be one. So far what I know, states that there a few really "big" companies that operate in this niche. I'm talking about companies like Farmland Partners and Gladstone Land (just to mention the two most popular ones). These companies are said to be farmer and investor operated. A somewhat clear distinction of how they operate is listed on their websites; some investors purchase the property and lease it to tenant farmers on triple-net leases, or some will purchase the property and hire a quality farmer to farm the grounds and split the profits 50-50. 

I'd like to know how most of these investors raise capital to purchase these properties, while also leaving room in deal for structuring a triple net lease or a new hire?  I'm trying not to get lost here with my own question, so specifically I'd like to know if someone on here has structured one of these deals before and would be willing to talk about it.

I'm also curious about "smaller-scale" companies doing this type of investing. To clarify, I'm not sure what I even mean by saying smaller-scale companies, I'm thinking any other company or single investor doing the same thing, but maybe not publicly traded. If anyone knows of anything like described, I'd appreciate a link or even a conversation. 

And if you're like me, with only an interest in this topic, please still leave a comment, I'd be happy to connect and see if I can help you find answers as well. 

@Eddie T. You've got a point, so here are some numbers. 

-listing price is $125,000

-approx repair costs $10,000

-closing costs $2000 

-ARV $145,000

-down payment 20% ($18,750)

-total monthly income $1,100

-total monthly expenses $1,276.63

it's clear right now the property is making negative cash flow each month, but that is because the current owner is renting one of the units below market price to one of his friends. The property is in a prime location, and after repairs the rents could go up $300-$400. 

@John Thedford

@John Thedford

@John Thedford thanks for the tip on cash offers, i'm sure that could be a bargaining tool, but I'm planning on going through traditional financing for this situation. I don't have a partner, and I think hard money is a last resort option for me.  

Hey BP Nation, 

I'm not sure if this a nation or not already, but I've found it is a great place to find answers from the community. 

I Recently re-listened to episode 247 of the BP podcast, and walked out with a ton of motivation. That same day I went out and sent out 100 letters to distressed owners and absentee owners. This was me taking advantage of the LAPS system mentioned in the show. I was generating leads and two weeks later I got six responses to my mail. Moving on to the analysis phase, three of the responses were out of my price range, two needed more work and are in kind of in a bad area, but one lucky duplex caught my eye. I analyzed the property further using the BP calculators and turns out the asking price is way too high for me to make a profit. I tried all three calculators (Fix and Flip, Wholesale, and Rental), but they all suggest I offer way less money for the deal. 

So now here's my question, Now that I'm on the proposal part of the LAPS system, I find it hard to offer $40,000 less than the asking price. I don't even know where to begin with the question. I'm trying hard not to fall in-love with this one deal, however it would suck if I just walked away because of the fear to ask. So does anyone have any suggestions on how to offer less money to the seller? 

I would appreciate any suggestions, thank YOU!

@Scott Dixon, thanks for the ideas. You're right about marketing to specific group niches and timing the school cycle. My partner and I are now planning strategies for the next semester.

Hello BP,

I am a new guy in the real estate space and I partnered up with another investor to purchase a 13 bedroom house right in middle of our local area (Champaign IL). And I was wondering if anyone has any advice on how we can get our first tenants in it?

Some details:

The initial idea was to advertise the property to everyone for $550/mo + utilities per room. We figured this was a good price when compared to local rentals in the area. However, now we think it will be "harder" to attain full occupancy with individual tenants. The next option is to have the property rented  to a larger group for $6500/mo + utilities. Bonus: we'd only have one lease to deal with, but face the problem of finding a large group of tenants. So full occupancy for each room or a hard to find 'single' tenant. 

If you reading this has any tips/ advice on we should go about attracting our fist tenants or even if you've been in a similar situation, I'd be happy to hear about it.