how to make money on lots in certain cases.
I can't remember whether I blogged on this before or not, and I'm techie challenged so,,,
There are a lot of developments out there right now that are in trouble. Too many lots, homes selling for less than you can build for, by a lot. I think in some instances, this is an area being overlooked by investors, if you're able to do the following.
I found a development in so tx that had 69 lots and only 3 homes. All lots had streets, lights and exterior was mostly fenced. Great city in demand and fantastic school district for elem-college. I decided to contact the developer and check his motivation. Lots were selling for 16-30K depending on size and location. I realized the developer was big time cash poor and needed to move something and reduce his debt service. I made him an offer on 5 lots and it was accepted. I built 5 homes and kept them as rentals. It added life to the area and a builder came in and built 2 more.
My 5 rented well and I bought 5 more. Same process and built on each and rented all of them.
Now, the development really looked good and had 15 homes. The developer had only received enuff to get the lots sold, released from his mortgage. I knew he was still hurting.
It was time to swoop in. I made an offer on the remaining 49 lots and received acceptance of 12K per lot. I had a couple conditions to use as back out. The development was u shaped and had 2 street entrances.
I had planned to go to the city to see if they'd allow a change to gated community and allow me to gate the 2 entrances. I received approval. Gaated is much in demand in s. texas. My lots were increased in value to 23-39K instantly.
The 2 entrances were gated, with electric, and phone was total of less than 20K. Prorated, it amounts to approx $300 per lot and increased values by double.
I've sold 2 lots, and sold 1 build job after the change. I have several good inquirires at present and hav not listed the lots. Minimal investment(after purchase) for maximum return.
You might want to scout around in your area for these projects. If you don't have the funds, find some retired person that is getting 1.5% annually on his money. there are lots of ways to make money in this real estate gold rush! Not for everyone, but definitely a viable method. Good luck. Rich in FL.