Sell the owned empty lot, or leverage it to buy next door?
About 10 years ago I bought an empty residential lot in a residential / light industrial area (think Podunk/rural Canada), thinking it was an "investment" that I would use to build a business on or put a trailer on it to rent out. Instead, I went away to University and now work professionally back home in Podunk.
I have held the property, and it has appreciated to approx 2x what I bought it for. The area is a C- neighbourhood, bordering on our equivalent of a war-zone. I have been approached by the landlord next door, he owns a 2bed, 1bath SFH directly adjacent to my lot, then a 10 unit apartment beside that. He has been offloading some of his lower end stock, owning approximately 70 doors in town. He wants to sell both, but I'm not really interested in taking on the apartment project.
The SFH is assessed at $62000, adjacent owned lot is assessed at $42800. The owner is asking $59k and it rents for $675/mo, renter pays the utilities.
Outside of this "C/D" deal, I am looking at a few multi-use commercial space in town to run my professional business from, so harvesting equity from this empty lot and having room on debt service ratios might be beneficial in the next year or so.
I am considering a few options.
1. Sell the empty lot and move equity to commercial or better multi-family real estate investments.
2. Leverage the lot and seek some seller financing for the SFH.
3. Make a low offer, prepared to pay cash through reserves + a LOC. Then mortgage through afterwards.
I am relatively new to the game though, I backed into being a landlord about 2 years ago, keeping our first house 5bed, 3bath house and renting it when we moved into our current house-hack with a 1Bed 1Bath basement suite. Please let me know if you have any advice or wisdom!
Thanks in advance.