Lots for sale... Buy or Pass?

Question

Hey all,
Today I came across a few empty lots for sale.

I checked out the properties online. They are about 1.5 hrs away from where I live, in towns with a population around 15,000. They are in neighborhoods with houses around them (most likely developed land). There are three total.

Lot #1 is listed alone for $3995. 75'x140'. It is in a new neighborhood, in a gated sub division with a private lake, golf courts and parks. Lots in the same neighborhoods are listed (but have not sold) for 5- 12k. Homes listed for sale in the same neighborhood range from $128k - $300k.

Lots #2 and #3 are 50'x150', in a different town, and are 1.4 miles apart from one another. They are listed for $5k together, or $3k individually. They don't seem to have much value, because HOUSES in the area range from 20k-147k.

I have no intention of living in these towns. I do not have the experience to build houses or manage a project of that scope.

I have the cash to buy some (or all) of these properties... But I think the best option would be to pass these up...

My question is... Is there any benefit to buying and holding land?
Are there any ways I can get some profit out of these lots? Possibly wholesale them?

Thanks for all replies!

Jackie Patterson · Answer

David, I would be very careful buying lots.  Builders across the country are crying for work, and many have gone under....especially those holding vacant land.  Also, unless you have the expertise, you don't know if these are buildable lots, or have an elevation problem, soil problem or drainage problem that would make them difficult to build on.  You need to have deep pockets to speculate on land.  However......if despite this advice you are interested in vacant land, I have several beautiful parcels I would love to sell you!

Jerry R. · Answer

I'm with Dan on this one.

You need to see what lots are selling for in the area and then you need to buy them at a much, much lower price.

Not many people are building now, but there are a lot of people buying land because of the great deals they can get.

If you can buy a lot for $4000 with good comps which have sold recently for $8000 which used to be worth $40,000 a few years ago then you have a deal.

Then just like wholesaling a house, you need to know who is buying these properties.

That's where a good agent comes in handy. Or else roll up your sleeves and look through pages upon pages of records in the county registrar to find these buyers.

David Gjeldum · Answer

Hey Dan,
Thanks for your reply. Seems like I should stick to areas where I really know the market, or know someone who does.

I've never heard someone recommend tracking a property to see what it sells for... Really great advice IMO... I'll do that and repost! Although it might be awhile  :roll:

Thanks Dan