Found a FSBO listing, good location, 25 acres raw land for $50k, where the comps are running $10k / ac or more.
But, here’s the problem:
“28 acres, more or less, of wooded, landlocked undivided interest.
Includes five of eight tax accounts out of a 41 acre tract. Sold with special warranty deed without title insurance.
Please be very familiar with undivided interest before contacting seller. Fractional interest owners deceased without wills or affidavits. Expect lengthy and complicated legal partition process. Buyer might have an internal title department to partition economically. Please text your understanding of this and resources for curing title prior to calling”
Ok so I’m looking at a lot of title work, skip tracing, probate, getting an easement, etc, I know that much. What I don’t know is how to estimate the feasibility of success, and how much this will all cost me.
Where would I start? With a title company and just ask their opinion?
I figure at this price for the land, I could spend another $30k and still have a great deal. Is that feasible?
thanks
Scott
Scott
you need to assess some of the following issues:
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check all 8 tax accounts. find the vesting deed when they were under one ownership. could be quite old.
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Identify the heirships and percentage if possible. the Filing fees alone could make or break the partition action to name all the heirs involved. This will give you a handle on the partition action. Check the relevant case law; go to AmJur and read up. don’t know what state you are in. check that State law books NY jur; FlJur, etc.
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getting your easement may be come difficult because of the partition action; don’t know the state you are in
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Seek competent legal counsel familiar with partition actions, check with State Bar for some in your local area. He or she should be Certified by the bar in real estate. very important.
I am not an attorney.
the first two break outs you can do for your cost of time, education and so you recognize what may be involved. Sounds interesting would love to know the follow through. suggestion: offer a lower amount pending settlement of case in your favor with full payment at conclusion. Just some thoughts.
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@russgoodman fantastic, thanks! I have an attorney friend who knows this stuff, will report when I get some action. -Scott
Buying a property that is an undivided interest is challenging in many respects. First, partition can be difficult, lengthy, and expensive. Unless you can contact the other undivided interests owners in the land and get them to agree to a partition (and the listing makes it sound like that isn’t going to be the case), you are likely in for a lengthy undertaking. You’ll definitely need an attorney and will have to petition for partition. And if one or more of the interests is subject to an unrecorded deed / improperly probated estate / unprobated estate, then you’ll have even more headaches.
Another issue that you should review is the aggregate ownership of the five owners who are selling their undivided interest in the parcel. Don’t assume that the ownership will be split equally, such that you - by buying 5 of 8 ownerships - will own a majority undivided interest in the parcel.
Additionally, though this is a matter of state law, the other owners in the tract may be able to lease the acreage to someone else without your say so. This is again a matter of state law, but in some states a simple majority of the undivided interest can act to grant easements, lease the acreage, etc. This creates other issues too lengthy to recount here, but just know that the price is discounted for a reason - and that reason is that it will be costly to either acquire full ownership in the tract or to partition.
@everydaydad thanks - yeah I found out it’s even more complicated than that, and not worth it for me… on to the next deal.