How do I price a lot that I want to wholesale?

Question

I'm new to real estate investing and I have a 7,000 sq ft lot that a motivated seller wants to sell. However, I'm not sure how to go about figuring out what to offer him for the lot. I have looked on Zillow but I'm not sure how accurate that is to use to gauge a pricing offer. Zillow says $18K and the seller intimated that he wants $18k, so I know that I can't go by Zillow on that. So once I figure out what to offer that he will accept, I'm hoping to assign the contract for at least $10k more to one of my cash buyers. Any advise? This is my first deal.

Luka Milicevic · Answer

@Michael Johnson If you want I can take a look

Bill Plymouth · Answer

Are there any new construction homes in the area?  What are they going for? How much per square foot does it cost to build a new construction home in that market?  This article might help you.

https://www.biggerpockets.com/...

Michael Johnson · Answer

@ Brian Van Pelt, if I can't assign the contract, I have a clause in my agreement that will give me an out of the agreement. I'm not looking to buy the lot, just to wholesale it. @Jay Hinrichs, the area is close to a main road and the surrounding homes are pretty old. I was thinking that being that the Nashville market is on fire right now, that could be a lot for a developer to build a duplex or a couple of townhomes. Not sure, but here in Nashville, we see new small developments like that popping up in everywhere regardless of how good or bad the surrounding homes or areas are.

Jay Hinrichs · Answer

unless new home construction is active in the area and VERY active waste of time.. the only one who is going to buy that small of a lot is usually a neighbor. and builder would want to see that U can close.. or know that you can.. other wise they just will make a back up offer.

for land and lots the game is you pay cash sell for double or more on EASY terms that's how the cheap land game has been played the last 100 years.

Brian Van Pelt · Answer

@Michael Johnson

Zillow is awful as a source for property values. Most people don't understand that Zillow is a marketing company whose primary source of income is selling Buyer and Seller leads to realtors. Ak a realtor to run comps for you.

Why not just buy the property ? and if you can't assign the property, what are you planning on doing ?