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?

This was originally a land purchase for us to build a small recreational cabin on.

How did you find this deal and how did you negotiate it?

I found this land on craigslist. The owner was selling it and offering owner financing. Since it was a good price with owner carry terms I took the deal as is.

How did you finance this deal?

The owner offered an owner carry note. It was around $1000 down with a 5-year note at 7% which we paid off early.

How did you add value to the deal?

We added value by improving the land and building a small recreational cabin. We spent about $20,000 on improvements. After the 1st year, we made rental income by renting part of the land out to a local grower. The grower added improvements to the land in exchange for lower rent.

What was the outcome?

The grower was interested in selling his business so we partnered with him to sell the land and his business. He sold his business for over $100,000 and we sold our land for $85,000.

Lessons learned? Challenges?

I would have filed a 1031 exchange and reinvested the money from the sale to buy another property to avoid paying taxes.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

No