Just acquired 6 lots from city. What to do?

3 Replies

Here's the story. After buying a home for myself I inquired at the city hall about some empty lots on the same block. Turns out the city owned them and were up for bid. City manager gave me a list of others in same town that I investigated.

I bid on six of them for 1k each. Looks like I own them now.

My first thought was build small single family homes on each and try to sell on spec. Construction cost of new home seems to nix the numbers for a decent return. Putting Mobile homes in and renting has better #s but no appreciation and tend to be trashed out after 5 years.

Or? Just put them up for sale, a comparable lot is for sale for 5k.

I'm new to the real estate world of investing but have made my first step, would appreciate advice on next move.

Most likely, there is a reason those lots weren't bought by someone else if they were publicly available when you purchased them.

Perhaps offer to sell them to neighbors who are interested in expanding their property?  Or sell them via seller-financing to someone looking to build on them?

@John Cumpton you need to investigate whether or not the lots are buildable, what the retirements are for utilities, permits etc. Once you determine the feasibility of building you then need to check comps to see what is selling and how much and then work backwards from there.

I agree with @J Scott lots that cheap don’t last if they are buildable so there may be a reason they haven’t been sold.

@Greg Dickerson

Thanks for the feedback. Just to add to the 'story". The town economy has been almost dormant for 3 decades. Section 8 apartments were built to offset the sluggish growth, resulting in a negative stigma about the town. A aluminum manufacturing plant has managed to grow with dismal choice of workers in the area. The plant has actually started building and expanding and expected to hire 200 more workers. The lots are buildable, maybe not the best neighborhood but the average of the town as a whole. New people will be coming and looking for a home, I have land.

At least this is my assessment.

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