Evaluating land for flipping

This week, I’d like to share some of my real estate investing experience with you. Basically, I will be going over how to evaluate different kinds of real estate investments. If you have any questions or comments, I would love to read them so please leave them below!

Today I’ll be talking about how to evaluate a piece of vacant land that you intend on flipping.

Here are the two questions that you need to ask yourself: 1) Will you be able to sell it and 2)Is it a deal?

Will you be able to sell it?

The answer to this question depends on various factors, including the size of the land and on whether or not the parcel has a clear title. In my experience, I have found that flipping land is much easier is you have a parcel of at least 5 acres in rural areas and 1 acres in residential areas (the exception being a buildable lot in a densely populated area).

A title report (which you can get by performing a title check yourself or hiring a title abstractor) will make sure there are no clouds on the title and clearing them up if there are any problems.

Is it a deal?

You can answer this question by looking at two simple pieces of information: how much can you get the property for and how much can you sell it for? Even if you get the property for a steal, if the market value is too low the deal may not even be worth your while.

While I actively try to get folks to steer away from the “dollars for hours” mentality, sometime sit can be valuable for evaluating how you spend your time. For example, you might think that buying a parcel for $100 and flipping it for $500 sounds like a nice profit. But when you factor in the cost of mailing letters, transferring the title twice, and the time you put into the deal, you might find that you actually lost money.

The key is learning how to get accurate comparables and how to buy for the lowest price possible.

Tomorrow I’ll share some tips for flipping houses.

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