Alternative Ways To Acquire land

[flyingvan]

    Warning----the specifics here are very regional, and your area will differ a bit.  There are a few alternatives to the real estate office when you're ready to buy land.  In real estate, if you gravitate towards the most hassle, you also save the most money---and learn a lot in the process.

     Method #1---Probate.

       The Cuyamaca Cottage sits on land bought through a probate sale.  I got it for about 30% market value.  There are many ways to find them---after you know what area you like, go to the probate court clerk in the area and ask for a print out of proceedings that include real estate ( might have to pay a fee).  Sometimes local realtors know, especially in rural areas.  I found mine in the back page of the local paper buried deep in the 'public notices'.  They are cheap because heirs of estates typically just want to liquidate everything, split it up, and get their money.  The probate attorneys want to stretch everything out---so if you find a property and the value is right, you then do all your own title searches, septic perk tests, property characteristics, property corners, everything.  Get all your ducks in a row and hire an escrow company, and present a check for the attorney.  Do not haggle---there's tons of back and forth between the attorney and the heirs that would have to happen, and if it's a bargain you're inviting competition at this point.

     Method #2---Foreclosures.  This is a bit easier.  You can pull up pre-foreclosures or foreclosures on sites like Trulia.  You can drive an area and spot the ones that might be distressed---is the propane tank disconnected and plugged into a 20# cylinder?  Is the house boarded up?  Yard untended?  Local realtors can help here, too.  Sometimes you can approach owners and make deals with them prior to foreclosure, but keep the lender in the loop.  There's another way to identify distressed properties that works for this and the third method---

   Method #3---Tax Lien Sale.  Here, when a property is 5 years tax defaulted, it goes to auction.  Opening bid is the taxes due.  Ususally there are no other liens on the property because those lienholders will just pay the tax and assume the property.  You can do a ton of research from your computer if the auction list includes the Assessor's Parcel Number---often you can plug that into a GIS system and get property dimensions, aerial photos, and elevation lines.  County of San Diego's site lets you plug APN's into a free 'property characteristics' page for all the zoning information for that lot, and KIVA NET lets you research old or opened building permits.  SANGIS (GIS, by the way, is internet mapping data--- different locales have different levels of sophistaction with that) will let you search by address, then you click on 'info' tab and get the APN.  Go to 'pay property taxes online' and enter the APN and the tax payment record appears---you will find out if they are up to date, defaulted, and who pays the tax.  If it's vacant land and defaulted, approaching the owners and making an offer has possibilities  (This is how I purchased my first O/B site, though it wasn't defaulted.  I searched the address for the APN, did the tax bill search which is public domain, found their names, and made an offer.  It took three offers---a suitcase full of cash and all paperwork filled out presented in person the day after Christmas convinced them)

[Squirl]

I like the negotiating pointers in the first one.  Thanks.

One very important thing in purchasing auction sales, in many states there is a right of redemption on auction sales.  So check into local laws first.  Either previous property owners or mortgage holders can pay off back taxes or liens and take properties back years after you have purchased it.  Then you would have to sue to impose a constructive trust to or under some other type of quasi contractual unjust enrichment claim to be compensated for any improvements you have made.  It can turn into a huge complicated costly legal battle.  Just be aware of it.

My personal take is if I was purchasing in a state with a 1 year right of redemption, I might not touch the property for a year, and I can litigate cases myself.

[flyingvan]

I'd never heard of that---that's good to know.  Here it only goes to the County Tax Sale Auction if there are no other liens, and the site is very clear that the previous owners' right of redemption expires midnight before the auction.  Sounds like that rule saves the courts some work.

[gbleuc]

    Warning----the specifics here are very regional, and your area will differ a bit.  There are a few alternatives to the real estate office when you're ready to buy land.  In real estate, if you gravitate towards the most hassle, you also save the most money---and learn a lot in the process.

     Method #1---Probate.

       The Cuyamaca Cottage sits on land bought through a probate sale.  I got it for about 30% market value.  There are many ways to find them---after you know what area you like, go to the probate court clerk in the area and ask for a print out of proceedings that include real estate ( might have to pay a fee).  Sometimes local realtors know, especially in rural areas.  I found mine in the back page of the local paper buried deep in the 'public notices'.  They are cheap because heirs of estates typically just want to liquidate everything... I searched the address for the APN, did the tax bill search which is public domain, found their names, and made an offer.  It took three offers---a suitcase full of cash and all paperwork filled out presented in person the day after Christmas convinced them)

Hi flyingvan! I've been lurking for a while and seeing this post prompted me to finally create an account and post Not sure if this will be seen as I know it's an old thread; I may start another if needed. I wanted to post in hopes you may be able to point me in the right direction- What you'd shared in here caught my attention.

I am located in San Diego County and have been evaluating potential affordable options for land purchase. Until reading your post, I had thought that I would have to move far in order to pull off the land/simple build plan, due to cost. Everything here is pricey and I had set aside max 70k for postage stamp somewhere + simple living build. While looking at places, I have been trying to find something with enough regional proximity (or alternately, seasonal relevance) that I could build a second simple structure or ADU of some kind to generate $ to offset costs. This is possible in other places, but I had not considered anything in California due to cost, and because I am notv really a desert person (seems like with southern CA especially, the more in the desert you are here, the less $.)

When I started reading about the alternative means you described, and given what you shared about finding something below market value, I thought maybe I should reach out and learn more about the San Diego option as well, and what you think it would cost to do something like this here? And what areas you would recommend based on these things? The probate sale method and strategy you laid out is an excellent recommendation. How frequently do you request probate court proceedings when you're looking?

Thanks so much for your consideration, and the excellent post!!

[flyingvan]

   If I'm interested in a parcel I'll talk to the neighbors and check the county tax site.  If the tax bill is addressed to an estate instead of an individual, and I'm really interested, it's worth a trip to the county records to find out about the estate.  Often you can approach the executor and save a lot of hassle.
   I was VERY interested in a specific parcel---directly uphill from where I built the Cuyamaca Cottage.   Awesome view of the lake, old burned out foundation, utilities...
   SANGIS Parcel Lookup http://sdgis.sandag.org/map.aspx  is the place to start.  Just zoom in until the APN appears.  If you're scoping out a neighborhood, start with Zillow.  Look for lots that are vacant or have junk, a dilapidated house, burned out trees---surrounded by nicer ones.  Zillow will usually give an address to use in the SANGIS lookup but if it doesn't you can usually figure out the address by using the nearby ones.
    https://www.sdttc.com/# The county tax bill site uses the APN for the tax bill number.  Plug in the APN and you can find who's responsible for paying the tax bill, and see if it's defaulted.  Pretty simple to see how defaulted---divide the annual amount by the amount due.  5 or more, it's going to auction.  https://www.sdttc.com/content/ttc/en/tax-collection/property-tax-sales.html (I haven't done the online auction yet) If you poke around the County site long enough you'll find the property characteristics page which gives great specifics about a parcel. (parcelquest)
    gbleuc, the money in real estate is where the hassle is.  The three competing influences are desirability, price, and convenience.  Like you I wanted to live somewhere nice.  As a city employee I have limited means.  So I target the inconvenient.  Every purchase has its own tale of hassles and problems---learn to embrace these and you're set for life. 
    Back to specifics and the parcel I wanted.  Using the method above, I discovered the parcel I wanted was held in trust by three people that didn't even know they'd inherited it.  Further searching revealed they had lost others to the property default auctions.  I sent some letters but never heard back.  I hand wrote a letter and hand addressed it and added paper that didn't need to be there to make it thicker---people in this financial place (losing property they didn't know they had) need a bit of a push.  Finally one heir responded.  I invited her and her husband to stay at the cottage I'd built.  I set the husband up to fish at the lake, and spent the day showing the heir the parcels she and her sisters owned.  I showed her we were really the only people with usable access and showed her how much $$$ she needed to redeem the property.
     There was family infighting that made things difficult, one co-heir was backpacking Europe.  I was 100% upfront and honest with her---I told her what the parcel was worth and offered her a mere 20% of that, with the condition I would handle all paperwork, back taxes, take it 'as-is'.  It happened to be the exact amount needed to redeem another parcel they co-owned and I printed up the exact steps to do that (knowing full well they never would.  I was right)
      Each of them took a turn wanting to be the hold out for more money.  Each of them got to hear me politely tell them they killed the deal--should I tell their sisters it's off?  The tough one was the European traveler---I had to reach her and get her to go to a consulate who I had to pay to have a notary ready.  She was actually the easiest to deal with.  Even though she was only getting 1/3 of 20% of the value of a parcel, it was still a huge unexpected windfall.
     It closed and I got title insurance.  Before it recorded with the county, the county discovered an old interested party attached to the parcel, someone long dead.  The title company dealt with the 'Lis Pedens' to get the name removed from title.  (I have to say---the first time I went through escrow I couldn't understand why I paid for both a title search and title insurance.   This is the third time it's saved me)
     Back to generalities-- look at many parcels.  Narrow the list down to ones you really could bond with.  Make certain it's buildable (perk tests, weird easements, etc) the ones with difficult social dynamics attached to it really tip the scales toward hassle and away from high price.  Be kind and honest with everyone involved---people won't sell at a loss to someone they don't like. 
     Most important make a good impression on the new neighbors.  Clean things up, and while you're hauling junk away ask the neighbors if you can haul anything for them too.  Improve easement accesses, trim trees to improve neighbors' views, show them what you plan to build before building.  It's stressful to have construction next door and unhappy neighbors can really make permit processes difficult

[gbleuc]

Hi flyingvan, thanks for this. The SANGIS/APN + county tax bill site recommendations are particularly helpful. It sounds like you certainly spent time and strategy in obtaining your parcel, and that the ordeal was worth it in the end. It's wild that they didn't even know they'd inherited it, and great that the title company was able to get the other prior name taken off. Extra hoops too, obtaining three people's buy-in. The title search and title insurance are crucial indeed.
I have no problem with hassle but I absolutely do need to know what I am getting into. I posted another question in the forum asking for book, reading, and research recommendations, which I am sifting through now-

https://countryplans.com/smf/index.php?topic=15100.new;topicseen#new

if you have anything to add, I will definitely read it.

Right now, I am narrowing down area, and have questions mostly related to this, though there's a few others too:

- What areas would you recommend looking at in San Diego based on the budget I described?
- Would you be willing to share your building costs and what your general costs looked like?
- How close to the coast is it worth looking before it gets too $$?
- Is a title search 100% reliable for catching all potentially hidden liens?


I've liked Oceanside/Vista and keep looking around that area, but it's gotten quite expensive in recent years and may not be feasible. I like Bonita but it too might be too close to the coast (cost-wise).

[flyingvan]

If you look hard and long enough you'll find bargains anywhere but in the balance equation of location/convenience/desirability/price, the local areas I think are undervalued for land --(apologies for the 99.99% of readers uninterested in the Sandy Eggo area)
---Imperial Beach.  Quiet little beach town, protected from Mexico by the Estuary
---Crest
---Japatul
---Boulevard
---Ranchita
---Top recommendation, Sunshine Summit.  You can get a fair amount of oak covered land for cheap, and Temecula isn't far.

   Cost---This is a handy tool http://legacy.building-cost.net/CornersType.asp Keep in mind at least half that is labor which I assume you're doing. 

This is interesting---last build, I spent as much on plan check and permit fees as materials.  I'm getting ready to do a boundary adjustment for the new lot, and building my 'man cave' as an accessory building.  I went to County DHS for preliminary septic stuff, and they were extremely accommodating---they will honor the perk test from the other adjacent lot.  The new limit is 1200 square feet instead of 400.  They are waiving the plan check and permit fees for the next 5 years for accessory structures---that's going to save $15,000.  What a different experience! California is really encouraging housing development .  Just keep this little tidbit in mind in case you can buy some dump and build as a an accessory building then tear down the original.....

   How close to the coast?  Maybe the way to answer that is through value added...WE bought our 435 square foot dump in Ocean Beach in 2005.  We struggled to make the payments, rented it out, and rode out the dip in the market.  Then we got to work on it and it's doubled and more in value.  That's a rebuild but could have been scraped and started fresh. 

  Title--you don't need the title search to find every lien.  You need it so a title company will insure the property against these hidden liens.  Once you close escrow and get title insurance, it's on them