Tommy DobczykOpportunity Zone Advisor, OZ Wizard · Director of Development | Certified Opportunity Zone Advisor

Unlock Land Deals: The 10-15% ARV Rule Explained! #shorts

29 Apr 2026 · 1 min

Watch on YouTube

1:01

In this YouTube short, Tommy Dobczyk outlines a core guideline for purchasing vacant land intended for development. He states that an investor should aim to pay between 10 % and 15 % of the property's after‑repair value (ARV) when acquiring a lot. The higher end (15 %) applies when the land already has utilities (electric, water, sewer/drainage) because those amenities add value. The lower end (10 %) is used when the buyer must demolish an existing structure before building. He illustrates the rule with two examples: a $500 k single‑family home would justify a lot price of $50‑$75 k, and a $1 M commercial build would justify a lot price of about $100 k. The video’s purpose is to give a quick, actionable rule‑of‑thumb for land deals.

Chapters

Today in the Deal Room. 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. So if you're building single family and the house is $500,000, you want to pay no more than 50. $50,000 to $75,000 for the lot, right? If the lot is for commercial and you can do a million-dollar building, you're not going to want to pay more than $100,000 for the lot, right? Call it a 10 to 15% range, because if it's got electric, water, and drainage or sewer, then we've got utilities on the property, and utilities on the property are valuable. So I'll give them 15%. I'll go to 15%. But beyond that, if I got to go knock a building down, it goes back down to 10.