Lot pricing


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  • A lady I’m working with just lost one of her rentals in a fire. She decided not to fix the home and just take the insurance money to pay off her note. She asked if I would like to buy her lot with the fire damaged home. I said yes, but I’m not sure what or how to determine the price. Then she pulls out the tax bill where it says “land value” and it shows 30K. Really, 30K for a burnt house needing a full repair in the sum of around 75K-100K? She as well as I wasn’t sure if that’s where we would start the pricing for a HBS. Homes on the street ARV for 120K-140K.
    So my question is… what’s the best way to determine a price just for the lot it with the burnt house?

    it will cost money to get the fire damaged house off the lot before you can do anything. so the lot is worth LESS with a fire damaged house on it.

    probably 1/2 of the tax assessors estimate of the lot value.

    do not buy it!

    just get an option then see if you can find a buyer to flip it to.

    Of course.. .I wasn’t planning to take title at all. When I said yes to her I meant yes to an option. I fully explained to her that I would go and find someone that may want it to rehab. She’s happy with anything as she’s counting the fire as a total loss. I may just make a deal stating for whatever price we get the lot for, we’ll split 50/50 . If we sell it for 12k, I’ll make a fast 6k.

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