Considering Lot for Glamping/Yurt Short Term Rental

[Account Closed]

Hey BP, I'd really appreciate some feedback on a deal I'm considering.

TL;DR

I'm getting into real-estate investing and have an opportunity to buy the lot next to my primary residence. It's located in North Phoenix (85086). Here's the key details.

- I have talked with the owner and he wants $190k for it; I believe I could work out seller financing or subject-to

- Lot has a tax lien on it of $75k

- Lot is located in unincorporated part of county (no HOA)

- Lot has no dwelling but does have shared well and electrical

- Major portion of the lot is in floodway (I'm sorting out what could be built where on the property with the County currently)

- I have about $10-15k liquid cash I could commit

- Main reason I want to buy this lot is to stop neighborhood kids from using it as moto-cross track (very annoying and hurts the neighborhood IMHO)

The Long Version

I just bought my first house (currently primary residence). I moved out here to turn a new page and get some peace and quiet. The lot next to mine is vacant and currently being abused by local dirt bikers as moto-cross track. I contacted the authorities and there's nothing I can do to stop it since I'm not the lot owner.

What I want to do is buy the lot, clean it up, and get at least enough cashflow from it to break even. My first thought is short term rental for glamping; maybe put in RV pads or some yurts. I'm working to confirm with the County what I could actually do on the property, but I believe something like this is possible. I only have about $15k of cash available but I think I could convince the seller to do subject-to or seller financing. I would also be open to partnering with someone on this.

I contacted the lot owner and gave me the history of the property. In short, he bought it and tried to build some houses on it but ran into issue (I believe because of the floodway that covers the majority of the property). He's older, is not willing to deal with this property anymore, and wants to sell. He wants $190k and there is a $75k tax lien on the property (I believe from him doing illegal things in the floodway). He did have a well (which is shared with a neighboring lot), and electrical service put in on the property.

About Me

I have been listening to BP for about 8 months now but have no actual experience investing in real-estate. In fact, I have no real-estate experience outside of buying my current house. My 5 year goal is full financial independence and I'm looking at real-estate investing as my path to this goal. I see buying this lot as a way to immediately improve my quality of life and get hands on experience with investing.

What are your thoughts? Any ideas on next steps? Thanks!!!

[Edmund Fletcher]

Hi Michael,

This is a pretty interesting situation. It seems like you would be leveraged quite a bit. What is the market value of the vacant land? How big is it? If you're interested in turning it into a glamping site, I would highly recommend listening to the RETipster Podcast episode 114. It's titled "Turning Vacant Lots into Glamorous Cash Flow Machines w/ Robuilt." The episode is a centered on an interview with a gentleman who's made his business about buying vacant lots and turning them into glamping sites.