Vacant lot in a gated retirement community in Arkansas

[Dan Miller]

An avid real estate investor who is a friend and serving as one of my mentors, made me aware of a couple plots of property in a gated retirement community in Arkansas. He has owned a few properties here, one which he sold for a nice profit of about $15000 after 15 months and another which he still is holding. He has a solid network down there with a real estate investor (essentially a wholesaler) and a RE agent. His wholesaler told him of these two properties, which are neighboring lots on a cul-de-sac, next to an already built home. the one that I'm considering is on the end of the cul-de-sac and will ahve no neighbors to its left (its common land that cannot be built on by rule of the association). It's also .85 acres, when the average property is about 1/3 of an acre, so it's big.

This community has about 10 golf courses, tennis, fitness centers, several large lakes, and lot of other amenities. Basically, it's a high end retirment community, and it's fairly large.

The lot I'm considering can be bought for 40k, and teh wholesaler told me that he would retail it for 50k (he got it for 32k), but since my friend has done business with him multiple times, and he knows we're investors (and he can immediatly sell the property), he will sell it for 40k.

My friend has told me that he generally holds the properties for about 12-18 months and sells them for profit (since they are purchased below market value). The RE agent serves as his eyes and ears locally, as we're both in different parts of the country.

My friend is a trustworthy person, and he has been very successful in real estate. As a result I trust his network and team in Arkansas. Plus the baby boomers are retiring, so retirement properties will continue to be in demand. The selling points on the lot I am considering are that 1) it's more secluded (cul-de-sac) and 2) is larger than most properties in the village. Lastly, it is about 1 mile from a Top 5 golf course in Arkansas.

If you were offered this deal, what questions/information would you seek to determine if it's a good deal?