Should I buy this vacation lot with this exit strategy in mind

[John Woolington]

I am new to this REI game. I was trying to find a small cheap lot of vacant land to flip and I found this small lot of in a poor town south of Pittsburgh on eBay auction.

https://rover.ebay.com/rover/0/0/0?mpre=https%3A%2...

I am winning right now at $1,654.00 and the seller said I could have it now if I want it.

I think I may have over bid on this property bc the community is very poor. The immediate neighborhood is very poor. I admit - I didn't do very good research prior to bidding.

I was originally thinking of doing seller financing... But then I realized that if the buyer defaulted, the costs of foreclosure would easily turn this into a investment into a loss. 

So then I thought what if I tried to rent it out with an option to buy at the end. I could start by hitting up the immediate neighbors of the lot with an offer something like this: $175 down and $175 a month with the option to buy for something nominal like $100 after 24 months of consistent rent payments.

Is there a legal way to do this in Luzerne Township, Fayette County, PA. 

And if so does that sound like a remotely appealing it feasible offer to one of the neighbors who is probably low income.

Thanks,

John Woolington

[Josh Caldwell]

Hi John

The bigger issue is who wants to buy that lot from you?   In rural areas there are far fewer buyers.  There are also fewer buyers who want to build on a lot.  It that lot was in Mars, you would have something. You might have real trouble getting anyone to buy the lot you are bidding on.  You might be better off losing this big.  IF you get stuck with the lot, I might be able to help, but then again, I might not be able to. 

Now if you happen to win, owner financing is your best hope to sell this thing.  You have already identified the potential problem with financing.  You are likely to pay more for the foreclosure than you would get if they cash you out. So the solution is to have your closing attorney hold the deed in escrow until they pay you off completely.  There are a number of ways to sell this thing with an owner financing device in PA, and not transfer title until you are paid 100%.  Ask your closing attorney which way they prefer to process this transaction, since they will be the one in court if it goes wrong.  I would use a lease option device that would give the buyer the rights of a tenant until I was paid in full.  That way you deal with a simple eviction rather than a foreclosure.  The difference is huge.  Feel free to reach out to me if you accidentally win this one. 

To your success

josh