What is HOA and Why it Matters in Land Investing (LA 1430)

What is HOA and Why it Matters in Land Investing (LA 1430) Transcript: Steve: Steve and Jill here. Jill: Hi. Steve: Welcome to the Land Academy Show, entertaining land investment talk. I'm Steven Jack Butala. Jill: And I'm Jill Dewitt broadcasting from sunny Southern California. Steve: Today, Jill and I talk about what is an HOA, and why does it matter in land investing? I hate them. Who doesn't? Jill: I know. Who wants more people involved telling you what you can and cannot do with the property that you own. By the way, they don't own it, you do. So I have a lot to say about this. Steve: I do, too. I have to tell you, I've always had this weird fascination with somehow requesting that clinical psychiatrists or psychologists do a dissertation on certain topics. And this has always been one of them. What psychologically makes someone choose, forget about the money, [crosstalk 00:01:02] make someone choose to start an HOA? Which I get, because you make some money. But more importantly, why do you seek out to live in an HOA or seek out some type of a land where there's more rules, not less? Is it better that we have more laws in life or less laws? Jill: I was just thinking that. Working at an HOA has got to be like the IRS. There's really no reason anyone's going to call you happy. They're calling you to find out what's the stupid rule, or why did I get fined? Steve: What's that movie, when the kids were little? It was a cartoon about the bunch of animals are living in the back of the woods, and they in they're all hibernating. And they woke up out of hibernation and there this massive subdivision where they used to live? Jill: Yep. Steve: What's it called? Hedge ... Jill: I forgot, and they went through the fence. Steve: Over the Hedge. Jill: That's right. Steve: Over the Hedge. Yeah. Jill: Okay. Steve: And there was this character in there, this woman who was the classic real estate agent/president of the HOA. And they took it to extremities where she would measure the length of everybody's lawn and then send them notes. Do you remember that? Jill: No. I mean, I do remember that movie, but I don't remember it in that level of detail that you have. I do not recall. That is so flipping funny. I love it. Steve: Before we get into it, let's take a question posted by one of our members on the landinvestors.com online community. It's free. Jill: Kristen wrote topic idea. Why do responding sellers have property with no physical access, or in a flood plain, and what to do about it? Oh, why do responding sellers have property with no physical hazards or a flood plan? What to do about it? I know new sellers shouldn't be buying these, but it's pretty much all I'm getting. Yeah. I like that. That's a good idea. Can we do that one day and really dive deep into it? Steve: Yeah, we can dive deep. I can give you the 32nd overview here, too, if you want. Jill: Go for it. Steve: Sellers almost always don't know about their property. They've inherited it. They've never seen it. I mean, back me up here or correct, Jill, probably 80% of the time, they have no idea about the property. Sometimes they live adjacent to it and that's a different story, so they don't know. No physical access can be remedied. It's not that complicated. You just need to get the right people involved and make sure that there's a ton of profit margin on it, because it takes a while. And if there's a process, then it's possible. The floodplain scenario, they're not going to know. It's only relatively new to land ownership that we can click on these FEMA maps at places like Neighbors Scoop, and just within seconds, see if the property is in a flood plain. Jill: Right. Steve: So even two years ago ... I mean, even now, if you go on to fema.gov and try to find out if a property ... it's a big, huge, massive process. So, that's not their fault at all. And what do you do about it? You just work through these things where you adjust the price.