Catherine's core rule for raw land: keep your purchase price between 10% and 15% of the after-repair value. A half-acre parcel at $245 per acre gets tested against two development paths, a quadplex or flex warehouse, with the group weighing whether the deal works as a flip, a build-out, or a wholesale play.
Today in the Deal Room.
But I'm just going to give the information on it. Let's see what— where it stands.
So, so yeah, let's, let's look at something real basic right off the jump. The one Catherine says, do the numbers, let the numbers tell you what to do. Right.
Okay.
And so in anything land, if it's just raw land.
Yeah.
There's some basic rules to follow in the sense of like when you're looking at the rules, to these things, you want to look at, are you within 10 or 15% of ARV? That's number one rule. Like vacant land, if there's a building on it and you have to knock it down and build, build up to build on it again, it makes the, the fair asking price or fair asking offer, FAO, or fair counteroffer, whatever, is to offer between 10 and 15% of the ARV of what you're building. All right, snapshot right there. All right, so half acre. Now again, you said a quadplex. I like, I like the, I like the play on the quadplex. Go ahead and go down. Quick valuation says that stuff right there is going for $245 an acre asking, but in that spot there, it's typically more like $15,000 to $300,000. But it says it's not overpriced.
What we can do is a 5,000, 7,000 square foot flex warehouse. Shows your incomes, your exit is, uh, right there, and it says this does not pencil. Option 2, land flip, entitlement doing all this stuff right here. I'm ready to build. Spread is only $50,000 to $100,000. Works only if you solve grading issues and your package is ready to build. Right. So having everything done, done.
So, yeah, I mean, it's a hard sell, brother. I can't say for sure that this would be something that I would—
I would be running after like grandma's cookies.
But he's just doing it. So he said he was going to do a wholesale on it.
Yeah, but even still, there's no act. Like when you get down there, we've got like 2 more or 3 more messages that we can tap into. I'll show you real quick.
Hit that button right there.
Nope, the microphone button again.
Okay.
So based on this information, it looks like there's maybe 1 or 2 options that we have for highest and best use at the price currently listed. We're going to try to get the property for like $80,000 for the half acre. Can you give me an idea of what it would look like to be able to wholesale this? And if that price is even doable based on the comps in the area, I want to stay in a I want to stay in a sale price of the land of about 10 to 15% of the highest and best use. So I want the, uh, ARV to be— I need the comps or the ARV for the area to determine what the sale price should be if I only want to pay between 10 and 15% for that property, is 10 to 15% of the ARV. Go ahead and send.
