Newbie Question About Vacant Land
I have been reading for months and now Im out searching for vacant properties in need of Re-Hab...well during my search I also found several empty lots in different neighborhoods. These lots have been there for years and years.
Has anyone ever tracked down owners of empty lots and made any money off of them...I am actually looking for houses but seeing those empty lots made me think.
Any shared experiences would be appreciated.
Stay away from vaccant land!!!! dont even think about it. If its a vaccant house great, find and contact the owner, if he wants to sell get a building inspector in there- check furnace,plumbing,roof.
The good thing about vaccant props is the owner many times will take a small payment and allow you to rehab the property with maybe a balloon payment 6mo to a year away for the balance.
vacant lots can be a great money making route. It is true that it takes proper due dilligence and investigation, but I have made great money with building lots.
Ok,I see there are to side to this one...why should I avoid....Im thinking with a little work I could maybe get some cheap land....but mybe it would be hard to sale...i dont know...could you give me some reasons you say avoid it..thanks for the help....
Rolltide,
Always ignore the advice of people who hand out hard and fast rules, "Never do X", without giving you reasons for the rule. Especially when that advice comes with a further stipulation, "don't even think about it". This is mindlessness at its most blatant.
The real estate biz is full of people who have one formula for success and believe that all other methods are of the devil. The smart guys know that there are a million routes to the bank and that the only thing that stays constant is change.
I'm currently working a vacant lot deal to acquire 70 vacant lots in not very good neighborhoods in Chicago. Its about as close to the kind of deal that HighC is advising you against thinking about as you can get. On the other hand I think I can net at least $5,000 per lot and handle the whole deal with a few phone calls and be in and out in less than 6 months. Believe me, I'm thinking about it.
The general reason given for not doing vacant land deals is that they have no cash flow-- therefore you have to cover the debt service from other sources of income. Which makes a certian amount of sense if you pay retail for the lots and have to hold them a long time. But if you buy the lots cheap and flip them or build on them pretty quickly then the neg. cash flow is not a big deal. In addition if you are willing to deal with the neg cash flow issue because you bought in an area appreciating for some reason then the lots can still be a good deal.
For every rule, (Don't do vacant land), there are a hundred exceptions (unless, unless, unless). The only way you will know whether you are dealing with the rule or the exceptions is to know the underlying reason for the rule and to use your brain. In other words "thinking about it" is exactly what you should be doing.
Thanks all,
Great discussion for my first post.
I appreciate it and will be asking more questions im sure...