LandInvestors.com Forums $10K a Month for Life; Cash Flow From Land Chapter 6 – Cash Flow From Land Help me analyze this deal – should I buy, option it or pass?

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  • #829

    Chris
    Participant
    Post count: 252

    Hi guys,

    So I had one seller who has a 5 acre property. It’s on a paved county road with electric in front of the property. It’s about 10 minutes to a nice river and 25 miles to the beach. The town that it’s in has a population of around 1000. It’s 30 minutes to a major tourist city.

    He paid $7000 for it about 25 years ago. He paid $5000 to have it cleared back in 2006 but then the real estate market fell apart so he couldn’t build. The next door neighbor with the same size property paid $15k for his property 18 years ago.

    I offered him $1000 which he laughed at. He mentioned he wanted 10k.

    The cheapest 5 acre property in this county on landwatch.com is $25k. There is a similar property under contract for $43k but it has a well. There are not many sales in this county, but I have seen some 5 acre parcels sales as low as $15k 1 county over (on a dirt road).

    The county appraisal is $17k.

    I think I could work him down on the price a little or perhaps I could option it for $10k and try to wholesale it for $15-20k? I think it’s worth around 25k but I don’t know how long it would take to sell at that price. There are 1/2 acre lots that are selling for between $5-10k in the area.

    Your thoughts?

Viewing 6 replies - 1 through 6 (of 6 total)
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  • Luke Smith
    Moderator
    Post count: 1263
    ProAdvanced

    First, congrats. You sent a mailer out and got a reply! Yipee.

    What is the harm in optioning it? Waste of time? I would option it. That way you can test the local market to see if you really want to be making offers there or at what price level.

    Test it with his property not your money.

    Chris
    Participant
    Post count: 252
    Pro

    Yes, I’m starting to think I should option it. I don’t really want to have 10k sitting in a deal waiting for a retail buyer.

    Chris
    Participant
    Post count: 252
    Pro

    Just an update, I’m sending him a new offer in the mail for $5k. It’s 20% of the lowest landwatch property and it feels like a safe price. If he agrees, I know I can sell for 10-15k fast.

    If I were to pay 10k, I may not be able to double my money quickly and I would feel obligated to hold out for a higher price and end up waiting longer.

    Aaron
    Participant
    Post count: 96
    Pro

    Any updates Chris?

    Chris
    Participant
    Post count: 252
    Pro

    I sent the 5k offer and haven’t heard back yet. I know he wanted 10k. It’s no big deal, I just need to keep making offers. Obviously we are working through lots of “no’s” to get to a yes. I will get there 🙂

    Luke Smith
    Moderator
    Post count: 1263
    ProAdvanced

    I had a guy call on the last mailer and say $500,000. I said no $500. He said no $500,000. We went back and fourth for a while. He said no, we play walkie talkie. I say a number, you say a number and we meet in the middle. He went back to $500,000 and I was still stuck at $500.

    I have not herd back.

    In the mean time others are calling and saying yes I would like to sell at your number.
    Just wish so many of them weren’t dead.

    My way of saying put an offer # in there and or work a different area if the number is too high to start with. Hit that area next time with profits from another area.

Viewing 6 replies - 1 through 6 (of 6 total)

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