Opportunity, perhaps. Want more articles like this? Create an account today to get BiggerPocket's best blog articles delivered to your inbox Sign up for free Some call it a decade of lost ownership and others call it the biggest housing bust since the great depression – investors call it big time opportunity. Finished lots are less costly than developing new: Over the course of the last couple years, investors have been buying finished lots on the cheap as they hope to capitalize on a housing recovery. Finished lots, in the simplest terms, means that the lot is ready for a house to be built and that there is water, sewer, and road access. You’ve probably seen hundreds of these near your house. If you live in Phoenix or Vegas where the pin popped a pretty big bubble, there may be upward of 40,000 finished lots in inventory. At today’s prices, in many cases, it’s simply less expensive to purchase a finished lot than to buy land and develop it. Banks want out: Banks left holding assets from defunct builders and developers want out. Most often than not, the bank receiver will seek out builders first then hedge funds and investors. Thus, the same as foreclosed homes, huge below market opportunities are out there. A local bank here in Indianapolis for example recently sold and marked down $1.5M in finished lots to $600k with special financing rates. An investor picked it up, and optioned it off to a builder on a take down schedule. Everyone wins – investor gets nice return for carrying the lots – builder doesn’t carry all the land and gets to spread out their takedowns. Banks are not lending to developers like they used to: When banks stop lending it can create opportunity. If all the finished lot inventory in recovering markets are sold or close to it, they are simply not being replenished because there isn’t capital available to develop new ones. Additionally, in most cases, you cannot take an undeveloped piece, add roads, sewer and water and create the building pad so it’s ready for a a house for anywhere near the cost of buying a finished lot at today’s prices. Where to look: Generally speaking, groups of investors haven’t necessarily been attracted to the hardest hit markets as much as the markets already on the rebound. For the most part, you will see investors making large scale investments in areas they think recovery will happen the fastest. Then, we see a lot of investors do off balance sheet / option deals with large scale private and public builders – or hold the inventory. Options are popular for builders as too much lot inventory is not considered good business when they are trying to climb back to profitability. In fact, many builders have been trying to dump lots at pennies on the dollar in areas that will not recover soon and reinvest in areas with a brighter near term future. A few more things to take into consideration: It’s not like flipping a house. You can’t add a nice kitchen, some carpeting, paint the exterior and increase value. In most cases you will buy and hold for a year or several years. If you have capital, or your a part of a group of investors with capital, contact a few builders and brokers about potential deals in your market. If your holding the lots, and a builder can tie them up with an option, a nice win – win may be in order.