I'm needing some advice on how I could possibly approach a property I own. I have purchased a $300k house, which I could rehab and still turn a profit on. However, it is a very deep lot in an area where houses are being torn down to make way for custom home construction for $1.5-2.5 million dollar homes. There are very few remaining original build houses in the area, and I feel like rehabbing it would just be a waste because eventually it will be sold, by me or someone else, to be torn down for new home construction.
Two older houses two streets back are both on the market for $600k+ and both state that they are valued based on new home potential on the land. My question is how do I determine the worth of the lot if I sold it to be used for this purpose and who would I sell it to? I'm thinking obviously custom home builders, a realtor that deals with customers wanting to build custom homes, or some type of broker, but what is the best avenue to explore?
I know the lot would be worth less than the two houses I just mentioned, because it is on the main road that the neighborhood is off of, but again the lot is deep and you can easily build a house at the back of the lot and have room for gates and landscaping.
If builders are buying houses in the area, tearing them down, and then building, whatever they bought the tear-down for is likely the value of the lot. Based on your post, I'm guessing that value is $600k or somewhat lower.
Don't get caught up on price per square foot of a tear-down house. It may be somewhat arbitrary because the value is in the land under it.
If you price it properly and there are builders in the area, it will sell even on the MLS.
I hope that helps. Tag me if you have follow-up questions.
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