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 johntreed.com) 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 johnbeck.com or johnnbeck.com . He also had one beckpublishing.com or beckpubl.com or beckpub.com . 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 InvestingRon Starr******