Putting the Cart Before the Horse: How NOT to do Your Due Diligence, and What to Do Instead.
Article Summary: THERE ARE AN IMPOSSIBLE NUMBER OF THINGS TO KNOW ABOUT “RESTRICTIONS,” WE HAVE BOUGHT AND SOLD MORE THAN 1500 PROPERTIES AND LEARN NEW THINGS ALL THE TIME. WE HAVE YET TO FIND A PROPERTY THAT IS TRULY “UNRESTRICTED.”
I receive many inquiries that sound just like this: “Hello, Are there any restrictions on this land?”
ANSWER: YES, ALWAYS. A BILLION THINGS, AND TOO MANY TO EVEN START DISCUSSING.
THERE ARE, TO START:
1.) Building Codes and Standards
2.) IN CALIFORNIA: Well Requirement for all Newly Permitted Off Grid Construction Since 2016. (No Water Hauling On New Residential Construction. Full Stop.)
3.) Zoning requirements, setback requirements, land use restrictions, blight restrictions, squar footage requirements, etc.
4.) Fire Codes
5.) Access Restrictions and codes
6.) Development Covenants/Historical Deed Restrictions
7.) Flood Maps and Restrictions, Insurance Requirements
8.) ETC.
There are a million billion little itsy bitsy teeny tiny particularities to know. You will never find them all out, you will never Know everything.
Here is an example of something we recently heard about from another investor who lives in Texas. He bought a vacant lot on a city street in a city in Texas, and thought it was a GREAT deal. It was the last empty commercial lot on a major road.
But He didn’t inquire with the city departments before buying about any specific use; he just looked to see if there were sewer lines in front of the property. The property was lower than the sewer lines, and generally you pump it up to the lines. Typically not a problem. BUT When he went to build, he found out that they wouldn’t permit a new sewer connection with a pump from that property; the sewer lines were already at capacity and adding the capacity plus the pressure wouldn’t work.
THIS WAS DEVASTATING, and a severe impairment to the value of the property. Even seasoned investors like my friend learn new things.
So you hear this story and YOU SAY: I WANT to know absolutely everything about the property before buying it. You are now scared and don’t want to make a mistake. You are thinking you want to know everything about these properties before getting under contract even. You don’t want to waste your time or money putting just any old property under contract.
This is a perfectly reasonable and understandable instinct. You have an inquisitive personality, and like to learn and research. You want to be a good consumer; you don't want to make a mistake !
But know this: There is more to know than you will ever find out.
You will find the more you learn, the more you don't know. It will be overwhelming, and keep you from making any decision at all. And that good deal you see on our website will be GONE, SCOOOPED up by someone else.
We have bought and sold ONE THOUSAND PLUS properties and still learn new things all of the time. Information is never perfect or complete.
So instead of being scared and getting into a vortex of Just In Case information, you need to learn Just In Time Information.
WHAT do we mean? WHAT YOU SHOULD YOU DO, what is the big secret ?
KNOW what you want a property for, and then ask the questions to see if that THING is allowed.
Because almost all land has some kind of use restrictions, especially in Colorado and California, The better question is this:
Can this land be used for _________ ? Who do I ask about _________?
This is how you get the best answers. With this approach, we can usually help you.
Remember: It is your job to make sure that a property will suit your needs and wants. We fully disclose all material facts about properties and often provide detailed property reports. However, we simply can not answer every single question about a property, which is why we will usually refer you to the authorities to answer specific questions. We definitely are not trying to make this harder; BUT we want you to make an informed decision.
So, to sum it up
Do not get sucked into the vortex of trying to know everything, you can’t know everything.
Know what you or someone would want to use the property for, and you can TEST that use against Restrictions.
ASK Questions ! Ask questions about questions!
Be proactive
READ/Make Phone Calls
We hope this helps. If you need anything from us, or are ready to move forward on a property, you can use the checkout from the website listing, or call us 24/7 at (323) 800-8379. Thank You for reading!
