Land in Los Angeles

Site Consultation for Developing Raw Land: Before purchasing land it is always smart to find out what you are getting yourself into. Would you buy a car you have never heard of without doing some research first? Probably not. With that in mind, it is usually a good idea to ‘kick the tires’ so-to-speak, when considering a vacant land purchase. But, unlike buying a car, where you can read consumer reviews and such online, information on a given piece of land may not be readily available. Additionally there are other factors to consider when doing your research. You may ask yourself: What are my goals? What do I want from this investment? Can this particular piece of vacant land be used to obtain my goals?

Many of the answers you may be able to find yourself, by simply having a defined sense of purpose. But the big answers will likely be elusive, like whether or not you can build what you want within the constraints of the property. Professional consultants are extremely helpful in this area.

A professional consultant can help you to make an educated decision when purchasing vacant land. Professional consultation is not free. But considering what it can save you in the long run, it is always a wise investment. Many people often brush aside consultation until it is required for the design and building process. You may spend plenty of money on design, not to mention the land itself, only to find out later that you have soil conditions on site that will prevent you from building what you actually want. The money lost at that stage can be tenfold the cost of an initial site consultation. Soils Engineers and Geologist are consultants who are very helpful when considering the purchase of vacant land.

Let’s start by understanding a few key definitions. Given the nature of the planet upon which which we live, our structures are placed upon foundations, which are supported by the earth. The earth, simplified, can be considered as soil or rock and or a combination of the two.

The application of the knowledge obtained from the study of soil and rock, along with the application of engineering principles in solving problems dealing with soil, is generally known as ‘Soil Engineering’. The term ‘Soil Engineering’ will often be used synonymously with the term ‘Geotechnical Engineering’ or ‘Soil Mechanics’. A Soil Engineer is a licensed engineer tasked with the evaluation of soil, rock, or other earth materials for the purpose of determining design parameters for a structure. A Soil Engineer is the individual who prepares a Soil Report, also commonly referred to as a Geotechnical Report. A Soil Report can be simply a basic background and preliminary report on a property, such as whether or not the site is buildable considering the condition of the earth materials present. It can also be a complete and inclusive design report providing all of the recommendations for a given project.

Often working together with the Soil Engineer will be a Geologist. Geology is the study of the physical material of the earth. A Geologist provides important information, and plays a definitive role in predicting and understanding natural hazards that may exist on, or beneath a plot of land. A Geologist typically develops a report separate, or in conjunction with the Soil Engineer, commonly referred to as a Geology Report. The information provided within the report plays an essential role in the formulation of design recommendations by the Soil Engineer. For example, a Geology Report may identify a potential landslide on a property based on certain historic data and current soil and rock conditions. The Soil Engineer can then apply that knowledge to develop design recommendations to repair the landslide, or avoid it altogether.

Now back to the goal. Most individuals who purchase vacant land want to build something on it, for example a house. With that in mind, now comes the difficult part. Finding vacant land that fits the Buyer’s needs. The real estate agent will handle that. Afterwards, the process should progress as follows:

Selection
The Buyer has found the perfect piece of land. But is it? He/she has an idea of what they want to build, a house. Let’s say it should be 5,000 square foot modern design. Prior to retaining the services of an architect, find out if the land is buildable. At this stage the Buyer would want to consult with the Soil Engineer and Geologist. The information and recommendation from the Soil Engineer and Geologist can help the Buyer determine if the land is buildable, safe, what should be avoided, and why. If it looks bad, or there is uncertainty, resume your vacant land search. Keep in mind though, that this is a general case, and that even a clean bill of health from the consultants does not mean anything will work on the site. A long way is still to go.

During escrow, and after one has an idea of the soil conditions on site, one may want to consider preliminary design. Now would be a good time to retain an architect for preliminary concepts. The architect can work with the consultant’s recommendations to put together ideas that meet what the Buyer wants. Additionally, the architect can put together some rough concepts to present to the local design review board, or homeowner’s association (if there is one), to get an idea of the feasibility of the project. if what is desired does not work on the selected property, one can still resume the land search.

Purchase
Now that the land has been purchased, the real work begins. At this stage one should have a more confident approach for achieving one’s design goals.

Design
Design will likely involve different professionals: the architect, structural engineer, Soil Engineer and Geologist. The design will have to be approved by outside entities, both government and citizen. Government entities would consist of the local Building and Safety officials, planning officials, utility providers, and in some cases, environmental health. Citizen entities would be the design review board or association in the respective neighborhood where the land is located. The design may have to be modified to comply with the requirements of such entities.

Additional input, in the form of calculations and design recommendations specific to architect’s plans, should be expected from the Soil Engineer and Geologist. The additional input is required because during the preliminary land selection process, the consultants only had a general idea of what was proposed. Now that the architect has a more exact design, Building and Safety requires consulting engineers to provide design recommendations specific to the architect’s plans.

The design stage can consume a lot of time and resources. It should be planned for accordingly. In some localities, the design process can proceed quite quickly. In others, it can be drawn out due to the various government agencies that have to grant approval.

This is the stage where the initial site consultation pays off. Can you imagine if this stage was reached, an considerable time and money were expended, only to discover that there are poor soil conditions on site, or, worse, a landslide that makes the site unbuildable?

Build
Once the design is completed, and the appropriate building permits and approvals have been obtained, one can commence building. During the building process, the Architect, Structural Engineer, and Soil Engineer will be involved to monitor progress, and to ensure compliance with the approved design recommendations.

Enjoy
Once the building is complete, the Buyer can move into the home and enjoy, or sell it and reap the well deserved benefits. So as can be seen, the process involves more than just buying vacant land because it has great curb appeal and a view. Just because it has a view, great curb appeal, or is in a great location, does not mean that something can be built on it. When a Buyer finds a piece of suitable vacant land, consider the above, and by all means, consult a Soil Engineer and Geologist.

I have been a realtor and real estate land specialist in Los Angeles for the past 15 years, creating opportunities for land-owners and Buyers by brokering vacant land throughout the Greater Los Angeles area. I can be contacted at sales (at) westsideland (dot) com and information can be obtained from www.westsideland.com

What is so exciting about buying land and building one’s own house, is that the Buyer of the land gets to build and live in their dream house and not somebody else’s house that forces the Buyer to compromise his or her dream.

But in pursuing this dream, Buyers must understand that all land is not created equal. In terms of geology, history, views, curb appeal, location and current and potential value, even similar pieces of land can look very, very different on paper. Whether the Buyer is shopping for a piece of land for a house, a ranch, a multi-unit complex or a new housing development, it is critical to understand that a piece of land is not just a piece of land. Equally, marketing vacant land is not the same as marketing homes for sale. The audience is different, the media is different, and the approach is different.

If the Buyer is not paying all cash, then financial pre-approval can make the difference between getting the land the Buyer wants and losing it to another Buyer. Pre-approval gives the Buyer a very clear picture of their financial readiness; it allows them to preview land in a realistic price range and make an offer confidently when they find a desirable and vacant lot. It will also allow the real estate agent to negotiate on their behalf from a position of strength.

Real Estate law is extensive and complex. The Land Purchase Contract is a legal and binding document. An improperly written Land Purchase Contract, may cause the sale to fall through, cost the Buyer dollars, time, unnecessary headaches and in a worst case scenario, a lawsuit. It is important that the Buyer and their real estate agent fully understand the Land Purchase Contract and the process that they are agreeing to and signing off on, so as to conclude the land sale transaction in a smooth and timely fashion.

Buying land is an educational process and the Buyer must participate fully in this process. The main roles of the real estate agent are to co-ordinate with and provide access to the land, for both Buyer and the Buyer’s hired professionals, i.e. geologist, soils engineer, civil engineer, surveyor, architect and general contractor, amongst others, so as to complete their due diligence and provide written reports for the Buyer so that a informed and educated decision can be made by the Buyer before deciding to purchase the vacant lot.

This is a rare time in our Real Estate history where vacant land is so well priced, thereby creating incredible opportunities for people who wish to buy a vacant lot, build a home that they desire or simply ‘cure’ the lot and hold on to it for a future sale. Buying land and building a new home, like anything else, is a process or better still a road map – to when the Buyer first walks onto that vacant lot until they turn the key in the front door of their brand new dream home. The land buying process seems daunting at first but supported by the ‘right team’ so-to-speak, will bring rich rewards at the end of this process.

With so many fabulous new and interesting building concepts nowadays, on how to be creative, build smart and efficiently and with state of the art technology, now is the time to buy land and Just Build it!

I have been a realtor and real estate land specialist in Los Angeles for the past 15 years, creating opportunities for land-owners and Buyers by brokering vacant land throughout the Greater Los Angeles area. I can be contacted at sales (at) westsideland (dot) com and information can be obtained from www.westsideland.com

Obtaining a loan from a bank right now is next to impossible if you are not the ‘perfect’ borrower. With the rules and guidelines changing daily, quality borrowers are being denied loans. What options exist for borrowers who are not ‘perfect’ to access the equity in their properties?

Hard Money aka Private Money will cut through endless reams of red tape you will experience today when dealing with banks. Private Equity Financing is at the vanguard of the lending industry, helping borrowers from the credit-challenged to those with triple A credit, close loans that would otherwise be denied.

Private Equity Lenders deal directly with lenders. This allows for loan terms and flexible underwriting standards that fit the needs of the borrower. The ability to think outside the box while crafting a loan is what sets Private Equity Lenders apart from institutional lenders. Those same banks are actually making more money from the Federal Government for not extending loans than they would if they loaned out the money to consumers.

In addition to being directly involved with the lenders and offering less red tape than a bank, Private Equity Lenders offer a range of products that cannot be found anywhere else. Whether you are looking for a 2nd mortgage, a loan on a mixed-use property, raw land or apartment units that do not debt service, Private Equity Lenders have the ability to close loans that banks would never consider.

Using loan to value ratios, the equity in your property, private lenders have the opportunity to do things that Banks cannot or will not do. Whether you want to cross collateralize multiple properties or if you need money for business purposes, Private Equity Lenders can be the best option for you.

I have been a realtor and real estate land specialist in Los Angeles for the past 15 years, creating opportunities for land-owners and buyers by brokering vacant land throughout the Greater Los Angeles area. I can be contacted at sales (at) westsideland (dot) com and information can be obtained from www.westsideland.com.

In all my years of selling land, I have never seen a more challenging time for financing land and construction projects. The financial collapse, the Real Estate and economic downturn have had an unprecedented affect on the ability to obtain land and construction financing. Hard money or private equity sources remain almost the only available resource.

Financing for land and construction loans has been hard hit because lending institutions have drastically reduced or eliminated offering these loan products. Lenders that once played an important role providing land and construction loans, such as Countrywide and IndyMac Bank no longer exist. From the person looking to find that perfect lot and build a dream home, to the developer looking to build a community, financing in this sector has been left almost entirely to raising private equity, and at a premium. Traditional financing sources do not want the risk in today’s financial environment – Banks have simply taken a position that they only want loans they can sell and eliminate any possible risk, even if the risk is completely mitigated. Banks have made it clear that are not willing to help consumers build their dream home. Having said that, Banks need to understand that many of their land loan customers are extremely unhappy with them right now. Banks are not helping or communicating with their land loan customers and their anger is growing daily with this lack of communication between Bank and customer. Let us not forget the power of the internet and blogging: Banks must listen, communicate and trust their customers because if the customer is not in control, Banks will pay dearly in the not too distant future.

Hard money and private equity lenders generally require a lower loan to value, or lower loan to cost, meaning getting financing will take more of an investment. Few lenders want to make land loans with more that a 50% loan to value, and sometimes want an even lower loan to value. Future value, in a stagnant market, is a significant consideration in obtaining construction financing. Yet as in all down markets, the greatest opportunities exist, since land prices are lower and costs to build are very favorable.

Although costs to obtain financing may be higher today and require greater investment, tremendous opportunities exist to take advantage of today’s vacant land market. Lending Institutions must help those with their vision of building their own home by providing financing, albeit with today’s realities. I firmly believe in the Los Angeles Real Estate market, and believe strongly that those who invest in creating their own home will not only enjoy the benefits of constructing their own piece of the American Dream, but will stand to profit in the long term.