Just a couple of weeks ago, I saved one of my coaching clients, Andy C. of California from making a huge investing mistake. His exact words to me at our last coaching session were, “Thank you so much, Joanne. I’m so glad that you told me to check whether the place is build-able.”
He found a building lot he was interested in bidding on in a Florida tax deed sale. He did his due diligence on the property and was ready to bid. But I had him do one more thing that he hadn’t thought about and he found out that the lot was not build-able as it was. In order to build on this lot it would cost thousands of dollars.
The First Investing Mistake He Avoided
He never thought to check on whether the lot was build-able or not because it was zoned residential, had road frontage and had properties around it. But after he did his homework from our coaching session, he found out that there were a couple of problems with this building lot. In order to put a house on it, it needed to be an acre, and it was just under an acre. He could get a variance from the town for only around $1000, and be able to build, except that there was one more problem.
The Second Bigger Problem He Uncovered
The road the property is on is a dirt road, and in order to build another house on that road, it would have to be paved. If anyone wanted to put a house on that lot, they would have to pave the road. Not just a driveway; the entire road would have to be paved. Now that would cost him tens of thousands and yes he could sell the land to another investor, or a builder, but who would pay for it knowing that in order to build on they would have to put up another 20, 30, maybe even 40K before they even started building!
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