Vacant Lot in a Tax Deed Sale - Is it worth clearing?

Question

So we're looking at a vacant lot that is zoned commercial and up for auction at a tax deed sale. Since we don't have much knowledge or experience in the commercial side of things, I'm wondering if it's worth it to put any kind of prep into the property.

There's a lot of stuff built around this lot, but the lot itself is just a bunch of trees that would need to be cleared away before there would be enough room to so much as pitch a tent.

When it comes to commercial property, is it worth the time and money to clear a lot before putting it up for sale? Would that help it to sell faster, or is it one of those things that commercial builders deal with so routinely that it doesn't even come into consideration before buying?

Is there anything else we could do to make a vacant commercial lot more attractive to potential buyers?

Felix Goldstein · Answer

it cepends on where the land is and what can be built on it.  i heard that some national companies have worked with city and paid to extend a street because they wanted to  build a store. so i would say nodont cut the trees however it depends on the location and what its good for on that land. so really cant give you a better answer until i know more abt the property. it might be a good idea to do boring samples to see how deep the footer has to be to build. i think they are called boring samples. so this is my 2 cents thats probably worth less then a cent

Joel Owens · Answer

You have to really know what you are buying.

A lot of developers like already entitled land that is cleared.

For example if I buy raw land like this parcel there are unknowns. I have to clear it which could get expensive if there is environmental on the land. I have to know the soil can support the load of a project in an economical way. If the soil is wonky I could spend 5 or 10 times what is normal building on it. Sightlines after clearing affect the value of the property. Varying topography levels and putting in horizontal improvements can get very expensive.

The commercial piece of land could sell now or in ten years. It depends on how far the growth is out from it, current traffic counts daily, and a ton of other metrics.

There is entitled land already cleared I can buy from developers right now sitting on the front of shopping center projects. I find the tenant and build on the already completed parcel.

There are other types of buyers that are not developers that just sit on land and wait 3,5,10 years before they get a return selling it off as part of their portfolio strategy.

I know some business owners who own about 20 gas stations and they make so much money with that so they like to buy land and sit on it because it requires nothing of them but to pay taxes on it and have time waiting for the return.