Land acquired at tax sale. Looking for ideas to develop or sell?

Question

I acquired about 3 acres of lots at tax sale in a very hot real estate market.  The 3 acres of lots are not contiguous but there are 6 lots that are contiguous where houses can be built on them.  The property in this area was subdivided into lots a long time ago (1950s) but the property was not developed.  As a result, people lost lots at tax sale.

The problem is that the 6 lots are land locked but there are places to build streets to the property because the subdivision lists the streets.  My 6 lots are located directly behind 3 houses that are on a street.  It would be easy to build a road to the 6 lots because they are not far from the already existing street.  I would just have to connect to the already existing street.

I think that it would still be expensive to build the street and then build houses on these lots. Once I build the houses, it may be hard to sell them because title insurance companies won't insure property acquired by tax sale because of potential title problems related to a tax sale.

I am wondering if any has advice as to how I can make this property productive.

Peter Walther · Answer

If the land was "subdivided" what makes you think they're land locked?  Just because there's no physical access doesn't mean there isn't legal access.

John Toerner · Answer

Thanks for the idea.  My cost basis is reasonably low since I acquired them at tax sale.  I should be able to make a profit but probably won't get full value.

One thought I had was to clear the land and rent it out as a short term rental for campers.  I'm not sure if that would be allowed in the neighborhood.

Edmund Fletcher · Answer

Hey John, how far under market value did you acquire these properties? Would it be worth flipping them as is for a quick buck? One idea might be to contact the builders who are already working in that subdivision and see if they are interested in acquiring them.

I agree that it would be pretty expensive to build a road and then build houses on each lot. It sounds like you would be assuming a lot of risk, especially if it would be difficult to sell them down the road.