A Simple Guide To Buying Residential Lots

A Simple Guide To Buying
Residential Lots For Home Or Investment
John A. Souerbry & Associates
Real Estate
SiliconValley – EastBay – Wine Country
www.jsrealproperty.com
1Copyright 2014 John A. Souerbry

Real Estate
Silicon Valley – East Bay– Wine Country
Why buy residential lots?
 Buy – hold – sell investment
 Buy – build – sell investment
(single family or subdivision)
 Buy – build – rent investment
(single family or multi-family)
 Personal residence (primary,
secondary, vacation)
 Expand boundaries of an
adjacent property

Real Estate
Here’s what we’re going to talk about…
Simple Guide To Buying Residential Land
 Site selection criteria
 Property search
 Analysis and inspection
 Structuring the purchase contract
The approach used to find
good residential lots is
essentially the same for
investment property as it is
a home – they both share
the same eventual use.

Real Estate
Site Selection Criteria
 Location
 Schools
 Close to friends & family
 Business commute
 Shopping & services
 Public facilities & services
 Public transportation
 Crime, noise, traffic
 Walk Score®
Walk Score® is a rating of availability of goods and services within walking distance. A high
score can improve the value of properties in suburban and urban locations.
Location is always the
primary factor in buying
land, since we plan to
build on it to suit our
purposes anyway.

Real Estate
 Neighborhood Value
 Prices of comparable properties (land and improvements)
 Forecast for potential changes in future values
Buy/build in a neighborhood where
comparable properties will support a
solid valuation of yours and where
values are forecast to improve.

Real Estate
 Lot Characteristics
 Size
 Topography
 View
 Drainage
 Exposure
 Surface features (water
rocks, trees, foliage)
 Soil
 Sub-surface conditions
Look for building sites that
suit the vision of the
improvements you plan to
build upon it.

Real Estate
 Improvement entitlements & restrictions
 Zoning
 Boundaries
 Easements
 Encroachments
 Limits (set-backs, footprint,
height, total square footage,
number and type of structures)
 Architectural mandates
 HOA requirements
Don’t expect the seller to
disclose everything you need to
know to use the land the way you
intend. Share you plans, ask
questions and do your
homework.

Real Estate
 Utilities and services
 Water
 Gas
 Electric
 Sewer
 Trash
 Communications
 Police
 Fire
The cost of connecting to
utilities can kill your budget.
Investigate the costs of each
hook-up and service.

Real Estate
 Ownership, improvement, occupancy
 Clear title
 Total acquisition costs
 Permit costs/schedule
 Total construction costs
 Recurring cost of
ownership
Create a realistic
cost/schedule budget –
with an appropriate reserve
– and stick to it.

Real Estate
Property Search
 Screen using search criteria
 Where to look for property
 Broker
 MLS/syndication/online
 Print ads, classifieds
 Pocket listings
 For Sale By Owner (FSBO)
 Auction/tax/probate sales
 Unsolicited offer
 Word of mouth
Suggested Reading:
“Where Does Real Estate For Sale Come From?” http://www.tinyurl.com/knfber4
“Making An Unsolicited Offer for An Unlisted Home” http://www.tinyurl.com/lmcsdbl
Refining your search
criteria will make search
activities more efficient.

Real Estate
Analysis and Inspection
 Create a checklist
 Assemble a team
 Determine what to look at
before making an offer and
what to look at during escrow
“A stitch in time saves nine.”
Thomas Fuller

Real Estate
Structuring The Purchase Contract
 Understand the competitive environment
 Buy with as many entitlements as possible
 If time is not a factor, consider buying an option
 Buy with an installment or “land contract”
 Joint Ventures (owner provides land, buyer develops)
Be conservative, creative
and concise when
structuring your offer. Be
prepared for counters.

Real Estate
In Summary
 Paint a complete picture of your wants and needs
 Consider every possible source to find properties
 Conduct all inspections and tests before you close escrow
 Structure the contract to best suit your needs
This presentation is available as an article with additional detail at:
www.tinyurl.com/n5zcvpw
Contact Us for more information or assistance.

CalBRE 01370983
Real Estate
Silicon Valley – East Bay – Wine Country

A Simple Guide To Buying Residential Lots

Recommended

Recommended

More Related Content

Recently uploaded

Recently uploaded (20)

Featured

Featured (20)

A Simple Guide To Buying Residential Lots