Flipping land or selling land with build plans?

Question

Hey BP Fam, looking for some feedback on this strategy. Anyone have experience land flipping or selling lots with build plans?

Eliott Elias · Answer

This works well in cities where the planning and permit office is a nightmare to deal with.

Sean Walton · Answer

I think it really depends a lot on how onerous the planning department approvals are. This is often done in the SF bay area because getting through planning entitlements takes so long once you have an approved entitlement it adds a lot of value assuming you had something worth building entitled. Mind you this is just planning approval which is the height and volume and look of the building it isn't getting down to code compliance documents that would still need to be approved by the building department. As other have said, check your local market and see how long things take to get approved and talk to local developers if they see value in what you are proposing.

Mack Lengel · Answer

Hopefully, I can shed a little bit of light on this one...

I and my team do this in the Smoky Mountains of Tennessee and we have a ton of success with it! The only thing is that we don't sell the land we sell pre-construction cabins. So the concept is similar but we approach it differently. Building here often works out better in the long run in our market so that's why we focus on it so heavily.

To answer your question, yes it works but you'll want to do your due diligence before getting into it. Talk with some Realtors and developers and get feedback. Any improvements or work you are putting into the land to make it more turnkey will increase the value but I can't speak to the returns in your market. Hope this helps!

Adrian Lemus · Answer

Yes, Value will could go up but I advise you to check the comps in the area to see what will be your best route.

Justin Hammerle · Answer

I would just say having gone through this quite a few times the process is a bit more complicated than a few bullet points. Buying a raw lot takes on quite a few risks not limited to understanding your utilities, infrastructure, and natural resource restrictions. Also, new construction approval can get fairly political on a town to town basis.

If you are going to go this route I would suggest at min for your first deal to make the closing on the raw lot contingent on approvals to protect your liability.

Adrian Lemus · Answer

You could probably sell it for $50k max with plans and Title Insurance

Briyana Hawkins · Answer

Thanks so much Adrian! Do you think the lot being zoned for a duplex can potentially increase that estimate? We’ve had this lot for some time now so just trying to figure out the best strategy so we can reinvest.

Flipping land or selling land with build plans?

Flipping land or selling land with build plans?

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