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Updated over 1 year ago on . Most recent reply
Flipping Land With Option Agreements and rezoneing
Ok so I have done several wholesale deals and have known nothing about land recently i heard about a guy that got a few acres of land under an option, had it rezoned and flipped it to a company and made 4 million in 3 months. I went down to permit/ zoning in my county and got current and future zoning plans so I know whats going on in my area. I KEEP HEARING THAT Option+Rezoning= Big Profit. Now that i have all present and future zoning for my county. What is the next step? Should I call realtors and get all land sales in the last 6 months?
The guy contacted an older man with some land ( 5 acers) put it under option on a 2 year contract then starting calling hotel owners and retail center owner. made 4 mil in 6 months on the side.
The logic makes sense but what do I need to do to make this happen. Im not lazy and no fear to make this happen. All comments are appreciated
Most Popular Reply
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First off, for everyone asking, by "option" he means a contract to buy the property in the future. I pay you $500 today for the option of buying the property at X date in the future for X amount. It also establishes the relationship between the optionor and optionee, the guy who gives you the option still owns the property, they'll have to give consent to rezone/replat/etc in some form or another.
You're adding value by rezoning, not by using the existing (or even proposed) zoning. If you're looking at an acre, currently zoned for single-family residential and the future zoning plan shows zoning for duplexes then the owner is going to sell it assuming you can build duplexes. You don't make any money there...
You make money by buying an option on land that is zoned Agriculture and getting P&Z to approve your retail corner/hotel plan (that wasn't already on the plans). So you take your cheap option from farmer Joe, give him a % of the sales to the developers and you pocket the rest after you've paid engineers and landscape architects who put your plans together for the rezone. Land in that case can go from being worth $3,000/ac to $100,000/ac. but you have to know what you're doing.
Your next step is finding some land to option and finding an attorney to draft the contract for you- the "out" clauses in those are important...