Episode-1628- Five Financial Landmines to Avoid when Buying Land
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Scott Todd is a principal at Landmodo.com, a land investment firm that buys and sells land throughout the US. Scott and his wife started the company to help others have a chance of land ownership.
Since 2012, Scott has watched as land owners make the same common repeated problems when it come to buying and owning land and he’s on a mission to help others discover how to avoid common issues with buying and owning land.
Land acquision is one of the most common goals among the TSP audience. Some want farms, some want homesteads, some want BOLs and others just land for investment. The smartest among you want all of those in one.
The issue though is land while a great investment is also full of risks. Worse most people have been lied to and believe that land and home ownership is largely the safest of all investments. Well purchased smartly it can be, yet their are 5 huge pitfalls you need to avoid to make that happen.
Today We Discuss 5 Major Problems When Buying and Owning Land
- Buying land without confirming that the deed is transferable
- Not having an exit strategy
- Not understanding the 3 deed types
- Not holding title correctly
- Not understanding the limitations of the land
Resources for today’s show…
- Join the Members Brigade
- The Year 1628
- Join Our Forum
- Walking To Freedom
- TSP Gear
- The Duck Chronicles – Video Series
- Backwoods Home – (sponsor of the day)
- Harvest Eating – (sponsor of the day)
- PDF of My Sausage Recipes
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Great show!!! Very timely. Will have to listen several times to let it sink in. We have made some mistakes & I tell they can bite you in the butt daily. Also the I wish I would have learned this tid bit. ALWAYS have an exit strategy a safety net plan too. How many times we have been stuck because we had no clue.
Also just because you are buying from family don’t skip the due diligence part. They may not know what they don’t know.
Thanks – I hope it helped you. Good Luck!
Just a little miss on average home size.
1600 SF in 1973, 2600 SF today.
Thanks Lane, I stand corrected, I missed the 1973 number by 1000, man, if I was only as good as Google!
Did you trim the episode to 1:11:11 on purpose? It hit my OCD alarm. Was wondering if yours went off in the first place while editing.
No sometimes shit happens, LOL, I don’t have the patience to try to do that on purpose.
I bought my home 5 years ago, before my wife and I were married, so it’s in my name only. We still have a mortgage, so of course I guess I technology don’t even hold the deed myself. I’m wondering if there’s anything we can do to add my wife’s name, so that if something were to happen to me, the bank can’t just foreclose and put her and the kids out on the street?
I would contact your mortgage company and see how you could add her to the deed without triggering the due on sale clause found in most mortgages.
What’s a due on sale clause? I recently added my wife to the deed even though the mortgage is just in my name. I simply contacted the local title company that handled that part of the home purchase, paid them $150 then an hour later picked up a copy of it in person (they retrieved and filed the new one themselves with the county, no need to even stop in except to pick it up, but they could have mailed it to me too.)
A due on sale clause is a condition in more mortgages that states that if the ownership changes they mortgage company has the right to make the whole loan due immediately.
Well I sure hope adding my wife didn’t trigger that. I had to add my wife because USCIS requires it to prove we are legitimately married for the green card renewal.
Being a title searcher I found this episode interesting. Of course I would like to add a thing or two.
First, be careful with those $125 title searches. If you are doing anything of value on the property you need Title Insurance. My sister and had to file such a claim on a lien for the developer that hit all the land he owned before he sun-divided it. I have found all kinds of weird possible clouds. If you get involved in mineral rights this is very true. Be very careful there, and a $125 search there is no good. I will charge you at least 10Xs that for a mineral ownership opinion.
Know your tenancy types for what you want. In some states married couples are automatically “tenants by the entirities.” This means you own it as a married couple only, and cannot convey just your interest. For example, if they actually owned the WH, Michelle Obama could not sell you just her interest. OTOH, if they were JTWROS she could. If you are married you might have a good reason for just one spouse on title (for example, investment property) but know before you buy.
Lastly, the show was not IMHO giving enough warning on Quit Claim Deeds. Again IMHO, the only time for a QCD is family matters. To add or remove a spouse, your adult kids, or in an estate. When you buy a QCD is barely worth the paper it is written on.
There are outfits selling distressed homes via QCD. Unless you accept possibly a total loss, NEVER buy this way. I would not risk >$1,000 buying on a QCD.
Finally, back to Title Insurance and why you need it. Say Jack listens to Scott and demands I write a Warranty Deed. Then he finds out that I did not have clear title to the property. He first has to find me, then he has to sue me, then he has to collect. Meanwhile, HE still owes his bank the mortgage payments! Might take years to collect, and he may never collect.
Jack, if you ever do a show on leasing the Gas and Oil on your property feel free to contact me.
I enjoyed the history segment and Alex is spot on about using a concordance like Strong’s with any study of the Bible. Alex was nice but I’ll be blunt, sometimes the Hebrew is intentionally mistranslated.
Example: Judges 4:4 Deborah, a prophetess, the wife of Lapidoth
all 19 english translations I looked at use the same words “the wife of Lapidoth” The problem is that Lapidoth is the absolute feminine form of Lapid whose name also means torch light or lightning. So do we have the first recorded gay marriage between Deborah and Lapidoth or did the Hebrew actually intend to make it very clear that Deborah was the woman of torch light or the woman of lightning?
I’ll leave it to you to decide why the english translators, all 19 of them, felt it was necessary to portray Deborah as a married woman rather than a strong possibly single woman who was known as the woman of lightning.
Our property is owned by a Joint Revocable Trust with my wife and I as trustees. This avoids probate.
I live in Box Elder county, one other thing not mentioned about the cheap land out here is that it is to salty to drill a well, most of it is landlocked and there is not any access to the land that you buy. To get power to your lot you may be paying for miles of power lines to be installed.
Scott, I went to your website, but was unable to find a way to contact you. Is there a way to discuss land purchases with you directly? Thank you.
You can call me at 407-536-9090