Wholesaling Land. How is it done?

Question

I've read some stories and even spoken to a few people briefly who said they got their start in wholesaling through land instead of houses. This was kind of interesting to me, but I  hadn't really looked into it too much until now. My husband and I just got a call from a guy who has 25,000 sqft of land he is wanting to sell in North Houston Area.

Q 1: As a wholesaler, how do I determine the numbers on this? Do I still use recent, local sales of vacant land? This particular land does include utilities, so how do I fact that in? How do I know what to pay per sqft vs what I can sell it for?

Q 2: Who are primary buyer for things like this? Retail or commercial? How do I find these buyers for something like this?

Karl James · Answer

@Jessica Martin

Since you are in the Houston area, you can check out the site Redfin.  Once you've got it up on your browser, type in the zip code for the Houston area lot.  Then you can use the 'filter' option to uncheck everything but land.  Use the filter options to show the ones for sale - will give you a feeling for asking price in the area.  Then, change the filter from for sale to 'Sold' and change the drop down box to show last 3 years.  That will give you insight into sale prices.  The will be MLS listed transaction - so it won't have deals done between individuals lie yourself and your potential seller.   For the Houston area this is a great way to get an initial perspective of comps.  Much bettr than HAR because HAR only gives a range for the sale price.  Redfin gives the price and the date for sales.  For listings, it gives days on market.  Once you get MLS access - you'll have even better insight (and I'll be calling you for help.)

Jessica Martin · Answer

thank you Jeremy. I will check that out

Jeremy Tillotson · Answer

@Jessica Martin it can be done just like houses, but you usually are selling to developers or builders, though I often sell with enough discount a larger investor will buy it to sit on it. If I make my money I have no problem giving a big discount for a fast sale. Last year I sold a property with a value of close to 100k, I got it for under 5k so when I struck a deal at 25k we sold. He will get his 100k in 5 years or more, I can make more money through my flipping with that money, and we made a good profit. You may find this to be a good read and listen to the podcast.

http://www.biggerpockets.com/forums/223/topics/173...

let me know if I can help in anyway