Feb 9 • Land Flips and Acquisitions
infill lots underwriting
Formula for determining the market value of land parcels, specifically infill lots, and a strategy for acquiring them at a favorable price.
Key Points:
Market Value Calculation (for regular lots): Identify 3-5 comparable recent sales (within 180 days).
Calculate the price per square foot (PPSF) for each comparable sale.
Average the PPSF values.
Multiply the average PPSF by the subject lot's size to estimate its market value.
Offer Strategy: Make an initial offer of 40%-70% of the calculated market value.
Acquisition Process:
Secure a purchase agreement with a small earnest money deposit and a due diligence period (if possible).
Find a buyer for the property before the purchase agreement expires.
Assign the purchase agreement to the new buyer for a higher price, generating a profit.
Utilize a title company or attorney to manage the closing process.
Infill Lot Valuation: Infill lots can be valued at 20%-25% of the median home price listed for sale or the average price of new construction in the area.
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infill lots underwriting
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