Land Improvement, Rental, and Flip

[Account Closed]

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