purchasing a house with extra building lot ?

Question

Hello, I am interested in buying a small single family house in a decent neighborhood (average median house price around 450k), but the seller would want to sell the land (50x100) next to it together for an extra 100k to make a deal. hypothetically I can negotiate it a lower price for the land (any suggestion on how to determine the value for the land), what kind of investment can I make to turn the land into something profitable rather than just being wasted? given this is in the state of NY and the property tax ($1649 yearly for the land) is high...any suggestions/comments?

Dan Weber · Answer

You need to go to the local building department and ask them about the zoning requirements for that address. Ask them what uses are allowed in that district and the dimensional requirements to determine if and what can be built there.

Xiang L. · Answer

Thanks for the nice story.. wish I could get a steal like that :)

Max T. · Answer

In 2013 I bought a small rowhome in philly with a vacant side lot for 170k.

I rented the home out for a few years and the lot was like a big side yard.

Then I put the lot up for sale and got it under contract for about 60k. I had to get a "release" from my mortgage lender. They wanted to be sure that the house I was keeping was worth enough to satisfy the loan.

I took some of my profit from selling the lot and paid down some of that debt with a refi. Now my cash flow on the rental house is better than ever, and I got to keep a nice chunk of cash in my pocket. It was as if I got back all the money I had spent on the purchase and rehab of the home back in 2013.

Now I have no cash in the deal and still have the little rental house.... The guy I sold the lot to built a monster new construction and sold it for close to 400k!