All Forum Posts by: John Becker

Once the proposed partition application has been approved, the Assessor will assign a new parcel number to each divided parcel (often the original parcel number with a letter suffix) and a new legal description. This legal description is what will define the new parcel on any future deed or contract.

The MLS land use code is just a generic designation and the "00-Vacant Residential" is a County Assessor designation. In other words they determined the value of the property based on it being vacant residential land.

To determine what you can build on it you need to know what it is zoned for. To get zoning and other valuable information just call the county Planning & Zoning office and they will be able to give you the final word.

Eric,

Price is only one consideration and you did a good job using sold comps but there are a few other things you should consider and could possibly use as negotiating points. 

First of all make sure the person you're talking to has the power to sell. Check the deed with the county/city recorder to see what kind it is first of all and then who it says owns the property. Often a couple bought a property a long time ago and when one dies and they didn't title the property correctly it has to go through probate and if that hasn't happened - no sale.

And then while checking with the recorder ask about any liens on mortgages on the property. Hopefully it is owned free and clear but checking is always a good idea.

Also, what's the property tax situation? Is it current or are there back taxes owed or possibly a lien on the property.

What's the property zoned for? Sounds like an infill lot so probably zoned residential  but a quick call to the county/city Planning & Zoning Dept. can give you a lot of good information.

And what is your exit strategy? Are you going to build or flip or hold. Once you understand your ultimate goal for the property you can work backwards from there to determine a plan that works for you today.

Not sure why you are interested in this specific niche but I will share my very limited experience with you. A few years back I had a relationship with someone who managed one of these facilities in Southern CA. I also believe you need a license to run one of these. She had a Masters in Hospital Admin. and worked for a company that owned many of these facilities all over the country. 

Her particular facility was nothing more than an old house or apartment building but it was in a great area near the ocean. Had a full kitchen, courtyard, and various specialties that would come in on a regular basis to treat the patients like different doctors and physical therapists. 

Her company actually rented this old building from someone but from what I remember it was a money maker. So it would seem to me that the older building with the larger bed count, assuming you had the proper licenses, staff, management, etc., would be the way to go. Maybe get it fixed up and sell it to one of these companies that make a business of owning these types of facilities. 

You're right, the holder of a mortgage on improved property would typically not let it go to auction. The mortgage holder, i.e. bank, etc., would either take over paying the taxes themselves to protect their security or repossess themselves. 

States typically are in one of two camps regarding how they recover delinquent property taxes. There are the tax deed states like CA where after 5 years they just auction off the property to a new owner or tax lien states like CO where they auction off a lien against the property to an investor who takes over the tax payments and possibly the property eventually.

For a property to make it to an auction years later it is usually owned free and clear and most properties in that category are vacant land which banks typically will not finance. 

Let me try to fill in some of the blanks here and hopefully some others will as well. First of all, when a property changes ownership, the seller (grantor) gives the buyer (grantee) a new signed, notarized deed which is typically recorded with the county Recorder. The Assessor then uses that information to assess a value for the property which the Treasurer then uses to calculate the tax amount.

The order in which those deeds are recorded with the Recorder is typically referred to as the chain of title where the grantee is typically the grantor in the following transaction with one exception, I believe, being repossession by the county of the property for delinquent taxes as you show above with Powell where Poor eventually gets the property.

Arkansas is a tax deed state meaning that after a certain period where the owner does not pay property taxes the state can auction off the property to a new owner. In this case that appears to be Poor, who after an extended right of redemption following the auction, was given a limited or special warranty deed making him the new owner or grantee.

How Rocon then enters the picture as the grantor in the next transaction is not clear since they were not the grantee in the previous transaction - Poor was. And one reason the neighbors that Poor allegedly sold the property to do not show up as the new owners is that since they are making payments, Poor may have seller financed the sale using a contract for deed (land contract) which means he keeps the deed in his name until the contract is fulfilled (all the payments are made) at which time he will record a new deed in the neighbors name.

Without knowing the area or the market here's some general things I would look at first of all. Call the assessor, whomever set that $27k value, and find out their formula for assessed value vs. market value. The assessor has to determine some market value to plug into their assessed value formula but it could still be way off. It's a start though.

Then you say that properties are selling for $10k - $20k an acre. How do you know that and what properties are they? Call a local real estate agent and get some recent sales comps as well as some intel on the market. Get their opinion of what that property is worth.

Then possibly check the internet, Realtor, Zillow.com. And also check FSBO properties on websites like Landwatch. If there are enough listings there you can get a feel for what your competition is looking to get.

And last but not least is your exit strategy. You say you want to double your money but after all of this research you will have a better feel for if that's possible and how long it might take. Also, get those questions answered about septic, well and filling the low spots. Think about how you will market this property. 

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.

I am in the vacant land business across the US and this is what I typically do. First, call the county or city recorder, whomever holds the deeds where you live and make sure 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 which could show an easement to access your landlocked 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, the current market determines that. Let me tell you that the country is littered with people who way overpaid for property before the recession and now want that same money back. See if your seller bought in 2005 to 2008 and you know they will have most likely way overpaid.

But, back to price, 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 (each gets their listings from different sources but often overlap) 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 will bear. The assesssor may also have this information - maybe even on their website as some do now.

Remember though, 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, why do you want this property? Understand your exit strategy before you do anything and it will guide you along the way. 

You say, "invested in multi-family property." Not sure what that means but assuming you mean you bought the vacant lot then you need to be thinking what is the highest and best use for that property. Three blocks from the beach I doubt self-storage or mobile homes is the right answer. 

And right next door you say there are already two income producing multi-family properties. Why not a third?

Go to your local REIC or somehow find a local builder or developer and partner with them. You contribute the property and they build the building. Then get permanent financing based on the equity in the building, pay off the construction loan, buy out the developer and have a cash flowing, appreciating investment forever - 3 blocks from the beach.

Of course you need to make sure all the numbers work but I own a building one block from the beach on the west coast and I rent apartments for astronomical sums in minutes to great tenants and as for appreciation - again great.