Buying lot in a subdivision

[Ebony Henderson]

Good Afternoon everyone!

I’m interested in investing in land and I was wondering if buy lots in an established subdivision and selling to homebuyers and good investment?

And is there any books, courses, videos etc that I can get more information on the investment.

[Matthew Bailey]

@Ebony Henderson

This is definitely a viable strategy. I invest exclusively in vacant land. There of course is due diligence you need to do.

The hard part (IMO) is knowing what builders are willing to pay. You can look on Zillow/Realtor/etc for new construction in those subdivisions and call those builders and try to sort out their acquisition criteria. There are some rules of thumb like “X” percent of the sale value of the new build. But I’ve seen some areas where those don’t apply. Be careful because the “for sale” value of lots may not necessarily be near the price where it makes sense as an investment, that might just be where homeowners are buying. You can sell to them too but don’t confuse the two valuations.

You also need to know what due diligence buyers do and make sure you don’t buy lots with buildability issues (percs/can fit a septic system, correct zoning, setback issues, wetlands, etc). The builders can help you with that potentially.

As for courses LandAcademy has an infill lot specific course that’s pretty good. RETipster.com also has a great educational material on land for free.

My advice, if you want to take action quickly, go on Zillow, filter by new construction, call those builders and see if you can bird dog for them (source deals), learn their acquisition criteria then go find those deals. Use direct mail to send letters to land owners that fit that criteria and negotiate a good enough deal to wholesale it to the builders.

While you’re doing that research those two land courses/websites and learn about land. But take action if you can, that’s the best way to learn. Don’t buy anything without the blessing of a builder (wholesale to them) and you can’t get that hurt.