Some properties are more trouble than they’re worth. And some properties are worth something because other people think they’re too much trouble. Landlocked properties are one such example. However, it is possible to buy and flip a problem property for profit.
Landlocked real estate is land with neither legal, nor actual, road access. Most properties are not landlocked, because there’s a way to access them. You just need to know some simple tricks for buying and flipping property for profit.
Finding properties to flip is often as easy as finding problem properties no one else wants. I know my way around this kind of thing, and I’m here to help.
What Potential Buyers Need to Know About Easements
If the county records show an easement to the property, then there is legal right of access. An easement is the right to use or enter someone else’s property without owning it. It means that you can literally take a backhoe and grade the road over that easement into their property. The owner of the land the easement is on cannot prevent you from doing it. The rights for the road are already established, even if the road doesn’t exist.
Sometimes, in rural areas, there is a physical road, but there was never an easement given for it. There was never a plan for the road. It’s just the easiest way to get around, and people have been using it and passing by the property for 10-15 years. In this case, you can effectively upgrade it as an easement by prescription. It’s been used so long and no one has complained. The easement just needs to be entered into the county records.
In some cases, there’s no actual road and no easement, and the property literally has no access. That is the only property that is truly landlocked. So, should you stay away from those properties when buying and flipping land for profit?
Tips for Making the Perfect Offer On a Landlocked Property
That depends on several variables. Personally, I don’t shy away from buying and flipping these properties for profit. But the price has to be right. The moment you find out that the property is landlocked, the value goes down and therefore, the offer goes down.
For example, a 10-acre parcel of land in a rural area might be worth $40,000 if it had road access. If it’s landlocked, I recommend cutting the value at least in half and making the offer from there.
In our Land Profit Generator Facebook group, Michelle and I hear stories every week of our students buying and flipping land for profits that are up to 10 and 20 cents on the dollar. Buying landlocked property can be a great opportunity because less people are willing to take the risk. You can buy cheaply, then quickly turn a big profit. Alternatively, you can take the time to get an easement to that property, and then sell it for a lot more.
Leveraging Easements to Increase Land Flipping Profit
This is where you have a big decision to make. If you solve the easement problem on your own, you can turn a much bigger profit. Or you can convince another buyer that getting an easement isn’t too difficult, and then make a quick and easy sale to that buyer.
Example: you buy a property for $4000 and sell it for $12,000 without an easement. You don’t think it’s worth the trouble of getting the easement so you disclose to the buyer that the property currently has no legal or physical road access. You also tell the buyer that, if he puts in road access to the property, he can double its value. So, you’ve created an opportunity and an attractive deal even though the property itself has a problem. Therefore, as long as you take the right approach, you can still buy and flip properties for profit – even when the property is seen as a difficult sell.
Questions to Ask When Considering How to Buy and Flip your Landlocked Property for Profit
- Do I have the time to go through all the hassle of creating an easement right now?
- If I do, is the extra money I’ll make worth my time?
- If I don’t, is there someone on my team who could do the work for me?
- Is there an easier way of getting an easement that I just haven’t thought of yet?
- Should I just sell the property quickly and let the buyer worry about the easement?
Bargaining With Neighbors when Buying and Flipping your Landlocked Property
Another option is contacting the nearest neighbor. The neighbor’s information is public record. You can send the neighbor a letter or look them up and give them a call. Say, “Hey, listen. Here’s the situation. I own 10 acres behind your property. Would you mind giving me an easement? There’s a space on the side of your property. It wouldn’t affect anything you do, and it would really help us. And, by the way, the law states that you can’t actually prevent me from making an easement.”
Most likely, the neighbor doesn’t want to get sued and go to court. Hopefully, they’ll be reasonable. They might ask for $500 for their trouble. That’s more than worth it. Five hundred dollars is a steal for making the difference between a landlocked value of $20,000 and the un-landlocked value of $40,000. This is buying and flipping land genius.
You can sell the property for $35,000 with seller financing, and the 20% down payment is already more than you paid for the property. And the monthly payments will be pure cash flow.
Closing the Deal on the Property
The steps for buying and flipping a landlocked property and making a profit are simple.
- First, determine whether or not the property is truly landlocked.
- If the property is landlocked – decide whether or not you want to mess with an easement.
- You can just flip the property if you decide that you don’t want to go to the trouble of getting an easement, .
- If it’s fairly easy to get the easement, you can do so and title companies and attorneys can help.
You capture the upside and now go to sell the property for way more than you initially thought it was worth. The original contract was signed under the premise of it being landlocked. Now, it’s not.
And you have just added another big success to your buying and flipping portfolio.
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If you enjoyed this article, you might want to visit Jack’s podcast about Flipping Landlocked properties HERE