First off, if you couldn’t tell by the subject of this post, I am new to REI. I have really appreciated all the information that I have gained from this site and I am really excited to be a part of the knowledge sharing.
I live a very up and coming area in my city. It use to be pretty “ghetto” until a lot of new builders are coming in and expanding the city. There is a particular house that I stopped into today and spoke with the owner who is selling it on his own. He said the house was appraised at $155,000 about a year ago when they mortgaged it. They still owe $125,000 on the mortgage, which he said could be acceptable for a purchase price but would like $130,00 to help with moving costs, etc. They aren’t incredibly motivated as they are building a new home, which won’t be ready until April.
The question is this:
The house is rundown with severe water damage on the back deck. However, the house is on a street where 3-4 large suburbs have popped up in the last year. In fact, it sits on .6 acre right next to one of the new suburbs being built. My thought is I could purchase the home on speculation that a new builder will want the land and I can therefore sell it to him for much more if I knock down the house and sell the land only.
Does anybody have any experience with this or any advice on how to research whether this would be a good deal or not?