Land Value Assessment

[Kevin Burns]

I'm looking to wholesale a property that is in real bad shape, built in the 1900's. Honestly, I think the only way to market this is as a pop-top, expanding the house into a full scale construction adding bedrooms, bathrooms, living space, the whole nine yards. Based on the comps I just don't see a general flip/remodel will leave enough profit, needing everything from new electrical, plumbing, cosmetic and all. What is the best way to assess the value of the land itself, seeing as the house is basically worthless except maybe it's foundation and basic frame?

[David Jacques]

Originally posted by @Kevin Burns:

I'm looking to wholesale a property that is in real bad shape, built in the 1900's. Honestly, I think the only way to market this is as a pop-top, expanding the house into a full scale construction adding bedrooms, bathrooms, living space, the whole nine yards. Based on the comps I just don't see a general flip/remodel will leave enough profit, needing everything from new electrical, plumbing, cosmetic and all. What is the best way to assess the value of the land itself, seeing as the house is basically worthless except maybe it's foundation and basic frame?

 Land value is determined (in simple fashion) by the following:

Final All in Sales Price for a Finished Home

- Desired Profit

- Selling Costs

- Construction Costs

- Development Costs 

- Soft/ Engineering/ Arch Costs

- Carry Costs

- Acquisition Costs

= Land Purchase Price

Put two developers in the same room evaluating the same property and the offer price can vary wildly, which is why land "value" is so subjective.