Tear downs

6 Replies

Hi everyone,

Does anyone have experience with wholesaling possible tear downs?

How do I know when a house is a tear down?

If it qualifies as a tear down, should I reduce my offer significantly or, as a wholesaler, stay away from the deal all together?

Thank you

You have to look at if people are building new construction in the area what you have is basically a lot.

Thomas Quinn There is a lot of new homes being built in my area. Is it easy to appraise a lot ?

Generally speaking, a tear down is a property that has no value other than the land. In some cases, It can be a little more complicated than that, but that's a good way to start thinking about it.

To start evaluating land values, look at new construction sales in an infill area. Assume that most of the lots that have new construction were tear downs and see if you can find out what the developer paid for the lot. 

Once you can identify what a tear down in your area looks like, start paying attention to what they sell for.

I just bought my second tear down property from the same wholesaler from whom I purchased the first.  I hope to buy many more from him.  In my area (northern suburb of Detroit) there is new construction on just about every block.  It is quite easy to see what i paid as my purchase (and every other builder's purchase) is on the public record.   I readily share my buying parameters as I will be happy when someone finds my next deal.

@Account Closed  The value is in the lot on tear downs. However; it's a little more complicated than that. There's costs associated with tearing down a building, and hauling it off. There's also value to having utilities to a parcel, sewer, etc. If there's a septic on an old parcel there's costs to removing it, etc. 

If you are considering getting into something like that, you want to make sure you understand the big picture. Know all the costs involved, the current market for lots, the values, zoning, anything that affects the parcel, etc. Good luck! 


We have experience with teardowns. For us, it is not a "wholesale" purchase or sale...the transaction occurs at current market prices...not under them as could be perceived by using the term "wholesale".

A house could be considered a teardown if homes in the immediate area are selling for around 3x the value of the subject property.

In many markets, teardowns are the most in-demand property type in the market...so it really depends on where you are and what's going on.

Hope that helps.


Brian Hickey


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