single family home w/ 2 empty lots - Posted by Brendon Collins

Posted by Brent_IL on November 28, 2000 at 03:57:32:

Check the legal to make sure the lots are actually deeded separately.

Once I bought a vacant lot at a tax sale in Chicago. I thought I was slick. It was next to a three-flat on which I had an offer pending. Offer not accepted. It turned out that the lot was too small to build anything on. A grandfathered garage was the only thing on the property. It had collapsed. I got a city notice to tear down and remove the garage, or pay to repair it. Taxes were low, so I told a local carpenter that he could rebuild the garage and rent it for storage. He repaired the roof and ignored the cosmetics. I got three windows plus installation in a building long-gone. He got the lot and $110.00 a month. Plus annual increases. Forever. Hmmm. I guess I wasn?t too slick the second time around either.

single family home w/ 2 empty lots - Posted by Brendon Collins

Posted by Brendon Collins on November 28, 2000 at 02:01:29:

I’m negotiating a deal for a single family home that includes an empty lot on either side of it. What are some creative options for these lots after purchase?

Re: single family home w/ 2 empty lots - Posted by ken in sc

Posted by ken in sc on November 28, 2000 at 07:37:12:

What if you could fix up the house and then sell it and wind up with two lots free and clear! Then, with no debt on the lots, you would have time to use them wisely. My first thought would be to trade them for equity in another house. For example, a builder who has a spec house that he hasn’t sold at the end of the year might take your lot as a downpayment on his house.

Also, the tax ramifications could be helpful. When you buy the house with two lots, your CPA may value the lots very low, so when you sell the house and keep the two lots, your taxes could be very low because most of your basis would be in the house and not the lots. Then, if your trade the lots for a downpayment on a brand new rental home, you would never really pay the tax on the profit made on this deal. Anyway, there are lots of things you can do if these are good building lots for new houses. Make sure they are, then have fun!