I had a lead come in today where the value is in the land. I have yet to visit the property, but based on the owners comments its pretty much done for. The owner also mentioned that in the past he was in talks with a developer to purchase his lot and the lot adjacent to his.
The lot is approximately 4.5 acres, and it is off a pretty busy street with alot of development around it..
1.) How can I accurately assess the value of the land other than looking up the tax assessment.
2.) Is it possible to flip to a builder or developer? Is it as simple as picking up the phone a calling Ryan Homes?
As always, thanks in advance for responses.
Hello @Edward Beard !
1) To accurately assess the value of any piece of property you will need comparables. In this case, you will need comparables of land that sold in the last 6-12 months. Depending on if similar land is being sold in the area, you might have to go back even further. Make a relationship with a real estate agent that you can trust and get comparables from him. Agents should have access to the property records of every recent sale.
2) It is very possible to flip to a builder or developer. A larger company such as Ryan homes will have a procedure that they follow. Usually, a development company will have someone who specifically looks for new land to purchase. They want a discount just like you so if you wanted more profit you would want to sell it to a smaller developer. Contacting either one will have people wanting to check it out if the numbers are correct.
Make sure you have it under some sort of contract before you do any of this.
Also, land is a little more speculative than buying a building, so make sure you come up with several exit strategies. One such strategy could be if you buy the land, you'd be willing to partner with a developer and share the profits instead of outright selling them the land. Either way, do lots and lots of research beforehand.
The two things I would want to know are 1) what is the zoning (res/com/mx and can it be subdivided) and 2) based on #1 and the surrounding development, what is the highest and best use of the land?
Talking to a commercial developer in addition to residential would be a good idea.
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