Just remember taht the broker is on the side of the seller. Hubby and I was thinking about buying some wooded land and to build a house, the 13 and 18 acre lots were going to auction(not foreclosure) this is just how things are down here, people use an auctioneer instead of listing the property. So we have the auctioneer who is also a realto show us the properties, we asked if the lots were buildable he said he doesn’t know why not…well we decided not to go to the auction. Both peices of land were 100% woods surrounded by hundreds of acres of woods and they sat about 1200 feet off the road. That means about $10-$12000 to have the electric company run the electric to the potential homesite. We passed. After the auction, I talked w/ the new owner, guess waht the lots are not buildable, you cannot get septic permits and the buyers boght for hunting purposes. Moral, don’t listen to the realto, find out for yourself.
I feel that its a good deal. What do I do? - Posted by curtis CA
Posted by curtis CA on August 14, 2005 at 12:42:45:
I looked in the newspaper this morning and I couldn’t believe my eyes. A guy is selling six lots for $395,000. So I called the broker and he was telling me that the lots are on a downslope and the you would have to go to the city for permission to build on it. He admitted that it would be a difficult process but it could be done. I asked him if there were any comps and how they came up with his asking price. He told me that he pulled the numbers out of a hat. Its priced to sell! Now, what do I do. I have no money (trying to find hard money lender nom!) no credit. Should I put it on contract and find a contractor or devlopment company to flip it to are should I try something else. Any fast advice would be a blessing.
I doubt they will let you lock up these lots with no money. Land is difficult to finance, especially if it is not buildable (30% down). You need to let this one slide by and look for a more suitable deal. Getting permits, zoning, etc could take months if not years. Are you prepared to handle the holding costs? It does not sound like it.
Undeveloped Land = no cash flow, hard to finance, highly speculative.
Houses = cash flow, easy to finance, generally solid investment.
How much do lots normally sell for where you are? If it is tat great of a deal then get a bird dog fee from another investor.
Re: I feel that its a good deal. What do I do? - Posted by Don Dion
Posted by Don Dion on August 14, 2005 at 20:19:22:
Go to the county building office yourself so you get first hand information. Also do your due diligance as far as multiple soil boring tests to make sure your pilings will hold. The engineering alone can run $15k per homesite or more.