Wholesaling vancant land...

[Trevon Peracca]

Hey BP,

Property owner said it's 0.85 acres of empty land. Claimed she paid 165,000 for the land originally but would take the best offer. Zillow claims the land is worth $160,000. Scheduled a meeting for 9am Thursday morning (1/21). 

My question is, how do I go about estimated cost for this property. Are there even buyers in the market for vacant land?

This is my first time experiencing this with a motivated seller, so any guidance would be great!

[John Becker]

Trevon,

I am in the vacant land business across the US and here's the steps I would suggest you quickly go through. First, call the county or city recorder, whomever holds the deeds in Hanover Park, and make sure the person you are talking to is the owner and what kind of deed they have (warranty is best). 

Next, call the county or city assessor or go on their website where they should have a property search function. Enter in the parcel number or name on the deed and see what information they provide you such as assessed value, last sale, size, zoning, etc. 

You could also call the Planning & Zoning or Building Dept. and see what the allowable uses are for that property's zoning designation. They would also be able to tell you about any future plans for the area.

Then, as far as price or value, the market determines that. Let me tell you that the country is littered with people who way overpaid for property before the recession and now want that same money back but that just is not going to happen. See if your seller bought in 2005 to 2008 and you know they will have most likely way overpaid.

But, back to price, you might ask the assessor what their formula is for assessed value vs. market value as a starting point. Then hit the internet to check listings. Try the biggies, Trulia and Realtor for agent listed properties and then the many other websites like Landwatch for FSBO lots. This will give you an idea what similar property sellers are hoping to get in the area.

Then, to get a true approximation of value, find a real estate agent who will search the MLS for actual sales. These are prices an actual buyer will pay and if there is enough data you will see what the market will bear. The assesssor may also have this information - maybe even on their website as some do now.

Also, others were correct in that you shouldn't pay market value - especially if you have a motivated seller. You want to leave lots of room between what the market will bear and what you pay to insulate you against unknowns. And last but not least, why do you want this property? Understand your exit strategy before you do anything and it will guide you along the way.