Should I do this deal???! (Raw land)

Question

BP Community -

What say ye on this deal -

I am purchasing a house for a flip and noticed the vacant lot next door was 10 years behind on taxes. I contacted the owner and she agreed to sell me the lot for $100 if I took care of back taxes ($2,600) and closing costs ($1,500) so I would be in the property for $4,200 or so. I live close so going over there to mow the lawn would not be a problem. The ongoing taxes are minimal (like $300 per year). A 3/2 that’s 1500 sq ft would sell for over 300k in this area. I should

Mention there is not an abundance of lots in this area.

My exit strategies would be:

1. Wholesale it for 15k or so

2. Sit on it for 5 or so years while I get experience flipping and the market appreciates and eventually do a spec build.

3. If it’s a total dud and neither of the above are viable, then donate it to a church and write off the value against my income.

Option 1 above is the best but the difficult part is that virtually no raw land has sold in this neighborhood in the last 5 years so I have no idea what someone may be willing to pay for a lot like this.

Has anyone successfully wholesaled a piece of land like this?

Hobart King · Answer

@Barry Pekin

Thanks all. Just got this thing under contract and construction has started on our flip next door :)

Hobart King · Answer

@Tamara Deering

She was extremely difficult to track down and didn’t even know she owned it. I recommend using skip genie (45/mo).

Barry Pekin · Answer

@Hobart King,

Of course I don't know the details like what area and all that, but I'd probably just go for it.  You have some good exit strategies planned, and I think it's a great low-cost opportunity to see what you can make of it.  With some creativity, you can't probably make a killing!

Larry Higgins · Answer

Appreciate the recommendation for Skip Genie @Hobart King , we take pride in being a prime resource for finding hard to find owners and heirs to properties.   Congrats on the  deal!

Benjamin Harris · Answer

It all depends on what your goals are.  Are you looking for cash?  Are you looking for cash flow?  Are you looking for equity appreciation long term?  Decide what your priorities are, then work backwards from there.  I would go ahead and list it for sale if that's anywhere near the top of your list, and just see what happens.  Just listing it and talking to leads will educate you about the property.  You can list it maybe a little on the high side if you don't want to sell quick, and it'll give you a good look at the market for vacant lots.

Tamara Deering · Answer

@Hobart King

I would buy it, finish your flip and hold the property until you know what to do with it.  If you could wholesale it great, but I don't think that is likely given what you have described.  I think you will be able to build on it sooner than you think.

Great find by the way.