How do I figure out what the lot is worth?

Question

Hi guys and thanks in advance!!

I managed to find a nice sized vacant lot while D4D and looked it up on assessors site. It's got a land (value, I guess) of $104,400 and a total net taxable value of $104,400. There were all zeros in the column for "improvements", "fixtures", "household personal property" and "business personal property".

I'm brand new to wholesaling and am enrolled in RE courses but I don't have a clue how to transition from wholesaling houses to wholesaling lots, let alone, commercial lots. In particular, I'm thrown off because there is no structure on the lot to be renovated when dealing with wholesaling lots. Also, this vacant lot is not listed anywhere that I have seen.

a. How do I figure out how much I should offer the owner? (I'll be going to the assessors office tomorrow to look up owner's info so I can make an offer)

b. How do I figure out how to pitch this commercial blank canvas to a buyer?

c. Since its zoned as "vacant commercial land", are there different protocols getting it under contract and for working with buyer and title company? Is process the same as for residential?

Any info is much appreciated! Thanks all!

TM

Patrick Johnson · Answer

@T M.

Hey,

Congrats on taking action and being in position to bring this one home. For lots, I've been told to find the ARV of the homes in the immediate vicinity (<1 mile), and to take about 15-20% of that number and that's round about what your max offer to the seller should be. That's if you can't find similar lots nearby that have been selling. So, $100k ARV average on recently sold homes in the area, I would approach the sellers with a MAO of $20k in mind for the lot. and work your way down from there. You got to leave room for your investor on the back end to come in, build anew, and profit as well.

Hope this helps, Good luck!

T M. · Answer

Thank you!