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Updated almost 5 years ago on .
Land Improvement, Rental, and Flip
Investment Info:
Other fix & flip investment.
Purchase price: $11,000
Cash invested: $20,000
Sale price: $85,000
This was a bare 10-acre land purchase that we built a small recreational cabin on. We then rented out part of the land to a local grower who invested in a greenhouse and placed it on the land. We partnered with the grower to sell this land and the adjacent land. Our part of the sale was $85,000.
What made you interested in investing in this type of deal?
Our original plan was to build a small cabin for ourselves and use the property recreationally.
How did you find this deal and how did you negotiate it?
I found this deal on craigslist for a person who was doing an owner carry deal for his 10-acre lot. Since the price was low and he offered good financing I accepted his listing price.
How did you finance this deal?
Owner Carry, $11,000 purchase price. $1000 down and a 7% interest rate over 5 years.
How did you add value to the deal?
We built a small recreational cabin and then rented the additional land to a local grower who added improvements to the land since the rent was so cheap.
What was the outcome?
$50,000 gain on the sale.
Lessons learned? Challenges?
I should have done a like for like exchange (1031) in order to avoid taxes on the sale and to reinvest into another property because we eventually bought a bigger piece of land with the profit from that sale.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
No