Buying and selling land/lots

**Cerebrus** · 04-02-2008, 05:28 PM

Alright I'm 19 and I have a friend who just let me know about some lots going for really cheap (according to him) for around $800... that are apparentally worth around $15,000 on the retail market. I'm working 60 hours a week trying to make $12,000 by September and I'm looking for a way to invest my money to make up the extra thousand as I'll likely only earn about $8000-9000 by that time (this is for college).

Anyways... how easy is it to buy a lot and re-sell it? I'm a complete and utter newbie at this obviously... is it a smart idea to try to do this given the current economic situation?

What about just buying/selling land? I found one place, 160 acres, going for $90... (in the middle of nowhere, but still... is it worth more than this? easy to re-sell?)

Thank you.

**Greg** · 04-03-2008, 07:02 AM

What makes these lots worth $15,000 if they are for sale at $800? Do you have some inside info?

If these lots are selling for $800 then they are probably not worth $15,000. Most real estate sales are accompanied by an appraisal. So when you go to sell your lot the appraiser will see that the lots were/are selling for $800 and and put the value of yours accordingly, thus killing your sale/profit.

A property is worth what someone is willing to pay for it. If these are available for $800 and they haven't been snapped up by an insider/investor then their value is $800 or less.

If you want to do this make sure you like the lot just in case you have to keep it for a long time.

**minnesota-mls** · 07-16-2008, 06:02 PM

Cerebrus,

Generally speaking, investing in land requires a fair amount of cash. Most lenders will not mortgage this sort of property for a very long period. As a result, most buyers end up paying cash.

Could be a good investment for a person, however, I would really encourage you to contact a top real estate agent in your area. Ask him or her for some comparable sales. See what other lots are selling for on the MLS. Check and see how these listings compare to the land you are looking at.

When in doubt, you should be able to find some great "comps" that can let you know what the value of the land is worth. These similar sales will help you determine what price you need to buy the lots at and if they can be resold for a profit.

Lastly, if you talk to any real seasoned builder, land (lots) are not moving real quickly right now. Here in Minnesota we have a ton of lots for sale on MLS...and they are not exactly getting snapped up by prospective buyers. With the recent changes in mortgage guidelines, fewer buyers are able to buy.

Again, I don't think it is a bad alternative for the right person and right situation. If you have cash you are able to put down, and a nice marketing plan to resell them (with a top agent), it could work out.

I hope this information helps out.