STRATEGY
LAND
BUDGET Are land costs included in construction budget?
EASEMENTS What is usable for the property owner?
FUNCTION Will the project fit the neighborhood?
It is also important to understand the different types of lots: inner city, suburban, and undeveloped.
INNER CITY LOTS Inner city is more of a socioeconomic term that typ- ically focuses on the older, poorer, and more dense- ly populated central section of a city. The economic framework of a city starts near the downtown area with architecture that contradicts the traditional style of homes built today. Great opportunities can now be found here due to urban decay. Urban decay is the sociological process by which a previously functioning city, or part of a city, falls into disrepair. You will notice vacancies and boarded up homes due to population migration or de-urbanization. Due to economic restructuring and lack of monetary support, abandoned buildings, vacant lots, and failing infrastructure are common. Many real estate agents and investors do not like to work in these areas be- cause they may take a while to reestablish. Additional- ly, these areas tend to have high local unemployment, fragmented families, and high crime. These are not the most comfortable environments and can create challenges finding property owners. In addition, vacant lots in the center of urban decay may have delinquent taxes, liens, or squatters. Finding the owners or heirs may require skip tracing, letter campaigns, and county clerk research. Typically when located, owners will not want to pay any accumu- lated taxes or penalties. This can be a great opportu- nity to either wholesale or keep for long-term appreci- ation. Look for houses that are boarded-up, then scan the neighborhood for lots close by. These lots typically can be purchased for pennies on the dollar. They will be valuable again!
Land: The Real Resource
first knowing the basic rules before you buy. Here are some of the crucial elements of purchasing lots:
WHY LOTS ARE THE OVERLOOKED GEM IN REI.
LOCATION Does it make sense to develop or build on this property?
by Joe Boston
ZONING Can the land be used for the intended purpose?
F
or many people, daily commutes to work consist of thinking about tasks and projects they need to do once they arrive at their destination. Often, the entire drive has been a blur. Ironically, real estate pro- fessionals and investors experience a similar journey to those commuting to an office each day. Real estate agents and investors drive directly to a subject prop- erty with the same determination of those getting to an office; however, they often fail to notice investment opportunities along the way. One of those opportunities is vacant lots. The real estate professional’s formal training starts with myriad courses aimed at securing listings and or assisting buyers. All are focused on sales volume of
existing homes and real estate. Real estate investors focus on some form of wholesaling, rehabbing, flipping, renting, and owner financing. All are tied to distressed people and homes that typically need immediate atten- tion. The standard process is marketing to target areas for homes within a certain price range or demograph- ic. Once the investor is contacted, an immediate visit ensues with the hopes of putting the property under contract. Well, what about the empty lot next to the listed or distressed house? Unfortunately, most real estate professionals have no idea how to evaluate lots or assign a value. Development all starts with the ability to foresee po- tential in a parcel of land or an available lot. That means
LOT SIZE REQUIREMENTS Do the dimensions meet the project scope criteria?
ACCESS Can the lot be accessed from front or rear?
RESTRICTIONS Are there restricted-use covenants preventing intended use?
SUBURBAN LOTS Suburbia is a residential area on the outskirts of a city. A suburban area is frequently a large community comprised of subdivisions. Look for advancement of
PERMITS Will special permits be required?
UTILITIES Does the property have access to utilities?
62 | think realty magazine :: september / october 2019
thinkrealty . com | 63
Made with FlippingBook Online newsletter