Buying, Scraping and Prepping Comm/Res Lots for Resale

[Ted S.]

There are posts here about different aspects of demolition and rehabbing lots, commercial and residential. I'd be interested in opinions or experiences about this proposed business model: (1) Identify lots that appear likely to increase in value. (2) Scrape the lot--i.e., demolish existing structures using a professional demolition company that follows all local regulations. (3) Move utility connections (stubs) to an appropriate access point. (3) Grade, gravel and fence the lot. (4) Hold as needed. (5) Resell. I'm a licensed RE agent, paying cash, making the assumption there's added value, and potential profit, in a prepped lot ready to build on. I know some people think it's better to buy lots and leave as-is. then sell when the time is right. My concern is about liability with old and potentially dangerous structures. Bottom line, you have to ask yourself: If this is such a great idea, why aren't a lot of people doing it? I talked with the owner of a top local demolition company. He said most people scrape with the intention of building new for themselves (not speculation). Comments?