I needed to take a little time before making this post in order to document the process. After some back and forth, my offer was accepted on the property mentioned in my last post. I was on my way to owning a piece (albeit a very small piece) of Beverly Hills - yup, 90210, swimming pools, movie stars...that's where I want to be... (packed a lot of references into that sentence). I entered into escrow on the property, made my down payment, and since the seller wanted a fast close I only had 15 days to remove any contingencies - which means I had to feel good with what I was purchasing before that time to avoid a penalty for cancelling the purchase.
This property had very little documentation on it beyond a survey – just an elevation map and my 'due diligence report'. I needed to have more research done to ensure the land was actually buildable at a reasonable cost. I already knew many of the building restrictions based on the report I commissioned, but what would it actually take to put a house on it. I talked with some engineering and construction firms - it all starts with soil and geology. After some quick research, and speaking with soil and geology experts, 15 days is not even close to getting a report done - also, that report can cost between 8-16K depending on what needed to be done after an initial discovery. It was pretty clear I would not have the time to really understand what I needed to about this property. However, one of the firms I spoke with - GeoConcepts - had a great proposal, within the timeframe designated, they could research any reports done surrounding this property to give a good indication of the geological conditions of the parcel. This could be done for 2K and if things were looking bad, they could stop the process before it reached a full report. This seemed like my best way to go.
I'll cut to the punchline. On the day that contingencies were to be removed and four days before closing, I cancelled my purchase of the property. Initial research showed that the land was pretty 'active'. A portion of the land was very step and had a city constructed wall on the roadway that ran along the property. That wall had to be reconstructed three times by the county due to landslides. Surrounding properties also had some issues with land shift. The final nail in the coffin - the land was already perceived as unbuildable due to geological conditions and to prove otherwise, in order to get the proper permitting, was going to be very expensive and time consuming.
After getting over that initial disappointment, I decided to revisit the other property that I did the report on - but by that time, it was already under contract...hmmmm.