I am buying triplex and separate parcel lot that is next to it all from the same owner. The empty parcel lot is next to the house. I am thinking of either selling the lot as is or eventually like to build on it and sell the house or possibly rent it out. Currently is just being used as extra parking for the 3 unit building next to it. I have never bought a blank lot before and I know there is a lot of language that can be added to standard Ohio contract to ensure just not buying useless piece of land such as it is zoned correctly, soil is good, able to get parking variances etc. I am putting in offer quickly and using the inspection period of the house to do my due diligence.
What things would you absolutely recommend I have in the contract?
What things are good to have in the contract?
Also any other useful information to know about buying land or parcels without buildings.
Even if I do not get this deal I would like to learn and educate myself more on buying land and things to look and look out for. Thanks and Cheers!
Welcome to BP!
If the lot is inside the city limits, the main things to check are zoning (e.g. residential lot) and what utilities are available. Water and sewer taps can get expensive in many cities, so it's a plus if these services are already available. If not, check with the planning department (city or county) to see what you can do (city services vs. well/septic) and what limitations the zoning may have.
Generally the way I look at land in a case like yours is that the seller needs to show me that the land has value. Otherwise, I am stuck paying taxes and maintenance (e.g. cutting grass to avoid fines;) for something that is worthless. Worthless means $0. Which is where I start in negotiating with sellers of junk lots. If I close... then I try to make lemonade. The 'ace' in your hand (assuming you deal yourself the ace) is knowing what the city will allow (parking or otherwise) and if the parcel could be worth something more to someone down the road. A little homework can pay off.
Check, if there's been a building on it before. Many empty lots in established neighborhoods, may have had a house that burned down or was torn down for another reason.
If so, then that usually means, that it used to have water and power and maybe gas and lines can easily be reestablished. Much more cost involved for a builder, if they have to start from scratch and get all that approved.
Then I would check the zoning. Is it zoned for SFR? Triplex? MF? And what kind of road frontage is required for that zoning? 40'? 50'? 60'? And does that lot have the required roadfrontage?
I don't know about your area, but in Atlanta, there are a number of lots, that have sewer trunklines running underneath. They may have had houses built on top of them 100 years ago, but now that the houses have been torn down, it makes it more difficult to build on the lot with today's zoning laws, distances etc. Some builders will move a trunkline, if he/she has enough ARV in a potential new construction. But most have never done it and it will narrow the potential field of buyers.
Well isn't it being used for parking for the triplex? That's some value especially if the triplex doesn't have any parking on its lot. Is the lot a legally platted lot? If it is, I wouldn't worry about the frontage as you can usually build on a legally nonconforming lot. If it isn't platted, you may have issues with the frontage requirements. Yes, check to see what it is zoned. The biggest issues I see is are you prepared to work out new parking arrangements if you were to build on it.
Put it in the contract that the seller obtain a zoning verification letter that states that the existing uses are conforming and to tell you if there have been any variances granted for the properties.
Thank you all for the advice! Truly appreciate. The property is zoned for residential and plated. Lot is the exact same size as the one I am purchasing that has the triplex. Also the same size as the other lot next to it, owned by a different owner. It is currently being used as parking for the tripled, and although Will hurt it a little. I would say about 40% of housing in neighborhood has off street parking attracts very good tenants. I own a 3 bed 2 unit few blocks away with no off street parking and have no problems getting too dollar comparable to any other rental in the neighborhood. I am going to put some pressure on the selling agent to find out more details. It is zoned for residential. So I think they took that as all that is needed but I will ask these questions that all of you have mentioned and more to prove the value. I believe the seller and sellers realtor are just trying to use that fact that it's a very hot neighborhood that it should automatically be sold for top dollar with the property next door and because its zoned residential shouldn't be problem to build on. Thanks again all!