I’ve been watching this forum for months, and I keep seeing the same pattern over and over. People bragging about buying parcels they found on some auction site or through a wholesaler, sight unseen, because “the numbers looked good” or “it was such a steal.”
Then three months later: “Help! My land is in a flood zone!” or “There’s no legal access!” or my personal favorite, “Turns out it’s a wetland and I can’t build anything.”
I get it. We all want to grow quickly. But this spray-and-pray approach is going to burn so many of you. I can tell you that the investors who consistently make money are the ones who do their homework.
Yes, it takes longer. Yes, you’ll pass on deals that might have worked out. But you’ll also avoid the disasters that wipe out your profits for the next two years.
If you haven’t physically walked a property or at least had boots-on-ground verification, you’re not investing, you’re gambling. And the house always wins in gambling.
Call me old school, but I’d rather buy one good piece of dirt a year that I actually understand than ten “deals” that might blow up in my face.
Who’s with me on this? Or am I just being paranoid?
@sallyhoskins I think what you are describing is buying a property with no due diligence whatsoever? I agree that’s a recipe for disaster, but I don’t hear of many people doing that.
On the flip side, I think most of us get into this business with the dream of “freedom of location” in mind. The online tools available nowadays for remote research are insane. That being said, I think you almost have to do dispo through realtors in some way or another so you can at least have boots on the ground. I think it’s a necessity to make that dream a reality and well worth the commission to help you avoid major headaches. Not necessary for every market, but most I think.
I agree you need to do your due diligence on each property, most of which can be done online or by calling county offices. If you just buy a property solely on price that’s surely going to backfire.
As far as boots on the ground, after we have a property under contract we send a drone pilot our for aerial/ ground photos and videos and they also give us a written report on things like the road condition, neighboring properties etc that’s helpful. If the results are unsatisfactory we don’t continue with the purchase. So far we’ve had two properties that really differed from what we found ourselves, one had unmanaged roads which then blocked access to our lot and a second was swampy despite the systems we use saying it wasn’t.
Even with all that you still might end up with surprises such as grumpy neighbors who maybe missed the drone pilot. We had a neighbor chase away our realtor and two potential buyers with a machete. While that deal was lost thankfully the realtor got the guy under control and we had actually a better offer come around the next week.
@Nicole This is GOLD! I am newer to the space and you always hear people talk about drones for disposition photos, but using it to kill 2 birds with one stone to do due diligence and at the same time take photos for the listing makes complete sense. Thanks so much for this tip!