Can you profit from foreclosed empty lots? - Posted by Jay Ketcherside

Posted by JT - IN on June 24, 2001 at 23:35:52:


I think that some of the properties that Jay was describing were in “declining areas”. I can read between the lines pretty well, and I take that to mean that they are not shooting paint balls in most of these areas, cause the’re usin “real lead”.

Good ideas, but I really think that these lots are unbuildable for other reasons.


Can you profit from foreclosed empty lots? - Posted by Jay Ketcherside

Posted by Jay Ketcherside on June 24, 2001 at 14:09:39:

Today, my city published a list of tax foreclosure properties to be sold to the highest bidder (sealed). Most of these properties are empty lots, and most of them are listed “no minimum bid.” I drove by them today, and they’re all in “bad” areas of town, a couple of them in areas with obvious drug problems. I have no ambitions of purchasing any of them for possible improvement, but from the looks of them, I really feel that many could be purchased for ANY bid, and I do mean ANY bid, and would hate to pass them up if there was a possibility that I could turn them around for a tidy profit, which might be possible in some of the areas that actually have residents. Anyone have any experience in this area? Should I bid, or just roll my window up and drive on? All replies will be greatly appreciated since I am very REI ignorant; I have until 7/17 to make bids.

Re: Can you profit from foreclosed empty lots? - Posted by Jay

Posted by Jay on June 25, 2001 at 01:46:05:

Thanks to all that have responded so far – Ronald, JT, Gina. Your advice has given me alot to think about. Until I read your advice, one option I was literally thinking about was bidding on all of the “no minimum bid” property for at least a dollar, since I figured not many others would want them – I might at least get two or three out of the deal. After mulling over you guys experience and knowledge, I realized I might actually end up with ALL I would have bid on, and not be able to get rid of any of it. I don’t think of paying property tax on 12 unsaleable properties for years to come a fun way to start REI, so thanks again.

It’s was quite funny, though, as I drove around today. One particular property was on a street where all the existing houses (those not already condemned and razed by the city)had their doors and windows completely boarded up; after that, I cancelled my trip to the properties on the “really bad” side of town. Seriously, though, there were two properties out of all of this that seemed quite decent; one across from a school, and another in an area that appears to be starting to renovate itself. I will do further research on these two, and possibly bid if everything seems okay. Thanks!

Re: Can you profit from foreclosed empty lots? - Posted by Gina Hinds

Posted by Gina Hinds on June 24, 2001 at 19:43:02:

My husband and I purchase tax defaulted property in California, and therefore wanted to respond to your post.

On these lots that you have looked at, is there any obvious answer that comes to mind? Does the area have a parking crunch where one of these lots could be turned into a parking lot? Could it be sold to one of the adjacent neighbors easily in order to give them more value to their property?

In the past we have not touched anything that was unbuildable, but after having a few people contact us, and after asking what they were going to use the lots for we were in complete amazement.

We even had a company contact us that wanted unbuildable land to expand his paint ball business into other areas of CA.

So don’t give up on “empty lots”, try to see it from a big picture perspective.

Good luck


Re: Can you profit from foreclosed empty lots? - Posted by Ronald * Starr

Posted by Ronald * Starr on June 24, 2001 at 16:12:44:

Jay Ketcherside--------------

I agree with JT-IN. I’m sorry I didn’t put in a word of caution in my earlier post.

I call the properties such as he mentions the “tax sale properties.” They recycle around and around. They come up at a new taxsale when their “proud owners” realize they made a mistake buying them at the old tax sale.

Sometimes the people who are “losing” properties at taxsale are acting rationally. The property is not work much, perhaps nothing, and they let them go to avoid wasting the money on the taxes.

However, even with that, if you are energetic, creative, and willing to put some effort into it, it is definately possible to make money with at least SOME of the properties on tax sales. As I posted earlier, even in a horrible part of North Richmond, CA, there was a sophisticated investor making good profit from BUILDABLE properties. Not all of which were built on then. May not be even now. But somebody valued them enough to buy them.

I assumed that you are a real investor, not just a wide-eyed “wantabe.” That is why I gave you references where you can educate yourself to make some profit from the taxsale properties. And why I am encouraging you. If you think you can just blindly go and buy any old lot and make money with it, well that might not be true.

Think of the follow:
Tax deduction for charitable contribution – perfectly legal.
Trading lots for services, goods, other properties.
Building up your personal financial statement to impress lenders, friends.
Selling to next-door neighbors.
Renting out to people who put small businesses on them.
Using them as part of a trade to help make the equities come out right.
Selling cheaply with owner financing to suckers.
Renting to billboard companies.
Leasing to celphone tower operators or microwave folk.
Selling air rights to developers of big buildings.
. . .

Ok, get the idea? There are ways to extract some of the value, even from the “worthless” parcels. Some people don’t believe a parcel is worthless. Then you sell it to them at very little money. Let them find out for themself whether it is worthless or not – you are an educator, helping them understand the world.

Good InvestingRon Starr*******

Maybe a deal, maybe NOT… - Posted by JT - IN

Posted by JT - IN on June 24, 2001 at 15:26:48:


Many of the unimproved Lots for sale in my area, have made the cycle several times. They have been bought at tax sale, by one investor, because they were cheap, comparatively speaking, only to realize what the previous owner had realized. The tax bill continues, no matter what, and if you are unsuccessful at moving these lots, (sale or lease), then they create a negative cash flow. A lot in a declining area, with no revenue, is not worth zero, it may be worth less than zero; you would have to pay me to take ownership of these. Be careful here, cause I do know of several investors, with eyes as big as saucers, thinking they were getting a deal, only to be losing the property to tax sale four or five yeas later. These can be negative energy, unless you can produce something with them, in a short period of time. As is often suggested here, know your exit strategy! Hopefully other than tax sale; again.

Just the way that I view things…


Re: Can you profit from empty lots? - Posted by Ronald * Starr

Posted by Ronald * Starr on June 24, 2001 at 14:50:11:

Jay Ketcherside------------

I specialize in buying real estate at county delinquent property tax sales. Most of the properties on tax auctions are vacant parcels or lots. Thus, if you want to make it easy on yourself, you should consider buying them. I only buy properties with improvements on them – houses. There are far fewer properties to buy, but I can make money renting them out after I have them.

Roy Stubblefield has a website about rax liens and tax auctions. In his recent e-mail “newsletter” he talked about how you can use vacant lots bought cheap at tax sales. You might be able to read that if you sign up for his newsletter.

Jack Reed, in his book “How to Buy Real Estate for at Least 20% Below Market Value” (website has a chapter on tax sales and talks about buying “worthless” or seemingly worthless properties and then selling for a profit.

John Beck used to do a seminar where he talked about something like two dozen different things to do with vacant properties bought cheap at tax sales. He had and may still have a booklet and tape set on donating low-cost properties for a charitable tax write-off. If he still sells that package, you might consider getting it. His phone number is 510+523-1267 (in CA). He has at least one web site, perhaps more. One is, I think or . He also had one or or . This is a very exciting way to use worthless lots, in my opinion, if you have federal income taxes you want to reduce.

I’ve come up with my own list of about 20-25 ways to use small or unbuildable lots. But that is for my own use only. I do not provide it to other people. I haven’t been using it lately, since I only buy houses now.

I spent part of a day driving around with an old-time investor who bought tax-sale properties in the worst areas of North Richmond, CA. Horrible area. He made much money reselling these parcels at market value, sometimes carrying the loan. We were checking on his “For Sale” signs and he told me sometimes the next door neighbors come out immediately and want to know about buying the properties. Sure enough, a short while later the next door neighbor to one of his vacant lots wanted to get his phone number so she could tell her daughter about the lot. He shrewdly got the daughter’s name and phone number also, so he could activily pursue that possible sale. As we drove around he was pointing out parcels left and right. “That one I paid, I think $3,500 and sold it all cash for $9,000. See that one with the house on it? They moved that house after buying it from me for $8,000, $2,000 down. I paid $2,000 for it.” And on and on.

He did not advertise them in the newspaper–too expense. But he did keep his signs on them. Sometimes they took several years to sell, but he always made a profit.

So, the answer to your question is yes, there is something to be done with worthless lots. In fact, it might be possible to make a fortune with them.

I would recommend checking to see what properties sold for in previous auctions, to help you figure out what you want to bid. Also, it would be well to check out the ordinary market prices for properties and how well they sell by talking to real estate agents in the area.

Good Investing******Ron Starr************