Today, Mark Podolsky discusses checking the water depth on any property you’re considering purchasing.
Mark talks to us about why knowing the water depth is important and how it can help determine the best use for the land.
Mike: Welcome back to the FlipNerd.com REI classroom, where experts from across the real estate invest and industry teach you quick lessons to take your business to the next level. And now, let’s meet today’s expert host.
Mark: It’s Mark Podolsky, the land geek, with the landgeek.com. And I’m pleased to be back on FlipNerd REI classroom. And if you remember about a month ago, we talked about a fatal land buying mistake, such as not confirming ownership of the property. So today, I want to expand that further to another fatal land buying mistake, that I see happen again, and again, and again. It’s so critical to not make the mistake and it’s a very simple due diligence or a research process.
Mike: This REI Classroom real estate lesson is sponsored by UglyOpportunities.com
Mark: What you want to confirm is the water depth of that property that you are potentially going to invest in. We need water. If we can’t get water on a property, it greatly diminishes the value.
Now, don’t get me wrong, I have acquired property 20, 30 cents to the dollar that had a terrible water depth. It would cost $20,000 to $30,000, way more than the value of the property, to hit water. And in that situation, you could be creative and you could put a storage tank on there. And you could actually bring water in. That being said, if you don’t know the water depth, if the water’s not potable, you need to know these things because we can’t survive without water. And if you’re going to go and invest in that property, you need to know what the true value of that property is, based on that characteristic of water.
To take it even a step further than that, we want to know the highest and best use of that parcel. Most parcels, the highest and best use is going to be to go vertical, to build something of value on that parcel. In some cases, let’s just pick on Florida. How about swampland? You wouldn’t believe it. Swampland actually has the highest and best use. You can grow shitake mushrooms on that property. Some properties, it might be putting up a billboard for advertising and getting the billboard rent. Other properties, it might be recreational. But you need to know these things prior to making that investment so you’re going in with total clarity and you know that your investment is going to yield a huge return.
We like to get returns of about 300% on the cash flip and 1000% on owner financing. You can always learn more about that at TheLandGeek.com. Thanks so much.
Mike: HomeVestors, the “We Buy Ugly House” folks, is a franchised system of hundreds of real estate investors that have purchased over 65,000 houses. If you’d like to learn more about the most powerful real estate investing system in existence, whether you’re a pro or looking to take your business to the next level or whether you have no experience at all, but a burning passion to be successful in real estate investing, please visit FlipNerd.com/ugly to learn more.
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