What to look for when buying raw land to possibly flip?
Hey all,
An out-of-town individual has a 1.75 acre parcel near me listed on CL. He's an investor that bought the property at a tax foreclosure auction for very little money. After a couple years sitting on it and not listing it (who knows why...), he's looking to get rid of it at a price that would be low enough that another investor (me?) could buy and flip within a short time frame.
For easy, round numbers, we're taking a purchase price of $20k with a tax appraisal of $100k. Neighbor's 2 acre lot has been on the market for some time at $150k. I'm not really familiar with comparative market analysis as it pertains to raw land, but I would think this parcel is worth around $75k-110k based on what has sold in the area.
Given the bargain price and the fact that the seller hasn't put it on the market --why hasn't he if he could list it for retail price?--I want to do my research. We all know that motivated sellers exist, and he apparently bought the lot for a song, so it could be a very good buy. County records say wetlands, but says "0% unbuildable," and there is a home on the lot adjacent and two lots down. Water/sewer/power appear to be available, but is something I can research.
Any advice from an experienced land flipper? What should I look for/research in order to feel comfortable that the land is buildable and worth something close to tax evaluation price? Buyer doesn't want to put the property under contract and waste time with what could be lengthy inspections (another possible red flag?) and would like to quit-claim the property to save $$$.
Ready, go! :)