How much do you spend on improving your purchase

[Dave2]

We are at the time of the year when most people are recovering from the holiday season, as a result things are generally quiet.  Thought I would ask a question that I have not seen discussed before.

How much additional investment do you put into your successful tax sale purchase for resale?

As I see it there are two general categories;  land and land and buildings.

a) First in talking (rural or vacation) land we have following basic investments;
    1) Survey;  
    2) Zoning upgrade
    3) Access and Entranceway  
    4) Site clearing
    5) Well
    6) Septic
    7) Bunkie

    Much beyond this and we are into putting a structure on it which is a different
    matter.

b) In buildings it varies a lot more because it depends what you bought.
     1) Demolition
     2) Permits
     3) Repair to stabilze
     4) Improve original building.  

Bottom line question are you better off selling as is or should you go for an improved model.  

Related question is what percentage of your original investment should you make.

Comments.  

[netpred]

Dave:

I would say that it all depends on the property, or for that matter, on whatever you are selling. Some you spend money on, some you don't. I remember my first job very well. I learned from an old man a long time ago a very valuable lesson; you buy for 5 cents and sell for 10 cents. This advice was not given for property sales but would apply in those cases as well. So long as you sell for more than you paid you do ok. By the same token, too many people fall in love with their own sh%t and think that it is worth a fortune. Make your money and live to make money another day. If it means that you sell at 75% retail, so be it. Otherwise you may hold forever to get 100%. If you bought well, you have room to play - let someone else try to squeeze the last dollar.

Unfortunately I have not yet had the opportunity to put my plan into action since I have not had much luck on the buying end.

[Dave2]

Unfortunately I have not yet had the opportunity to put my plan into action since I have not had much luck on the buying end.

I will compare batting averages with you offline.  I bet yours is better then mine for a coffee. 

The point you make is valid because there is definitely a finite value in the amount of improvement you should invest in.  My argument is that selling raw land may not be the best way to resell particularly rural property.

There has been some argument on this board about the pros and cons of using a real estate agent.  One of the beefs I have is that for most rural property the standard realtor phraselogy on MLS is "Purchaser to do his own do diligence".   Thats why for one
I am not happy with using a real estate agent. 

I would argue that with the US mortgage crisis buyers are more picky and also more informed.  Certainly if you want to sell to a builder; they want the property already rezoned.  If you have done your homework for the right type of property the costs of it are not huge. 
 

[baller50]

Putting a driveway and a clearing into a property will only increase the value of land that was before just Bush.

your investment in a good contractor to do the work will almost always Reap the rewards.

[MHT]

Unfortunately I have not yet had the opportunity to put my plan into action since I have not had much luck on the buying end.

I will compare batting averages with you offline.  I bet yours is better then mine for a coffee. 

The point you make is valid because there is definitely a finite value in the amount of improvement you should invest in.  My argument is that selling raw land may not be the best way to resell particularly rural property.

There has been some argument on this board about the pros and cons of using a real estate agent.  One of the beefs I have is that for most rural property the standard realtor phraselogy on MLS is "Purchaser to do his own do diligence".   Thats why for one
I am not happy with using a real estate agent. 

I would argue that with the US mortgage crisis buyers are more picky and also more informed.  Certainly if you want to sell to a builder; they want the property already rezoned.  If you have done your homework for the right type of property the costs of it are not huge. 
 

The reason that agents state that the buyer is to do their own due diligence is to protect their seller (and themselves of course).  When people see a lot in a city subdivision, it is obvious what can and can not be built there.  With rural properties, people (buyers) get all sorts of ideas as to what they want to do with the property so we always have them contact the municipality to find out if they can do what it is that they hope to do with that property.   If I have a 25 acre parcel listed some people will want to build a house, others want to put a mobile on it, others want to grow crops, others want a hobby farm, others think they can subdivide it, and the list goes on.  I am not going to have my client go out on a limb and say yes this or that can be done with the given property.  The buyer can simply call, ask about their specific plans, and see if they can or can not do what they want.  When representing a buyer I would never take the word of the seller or their agent anyways....we always do our own due diligence.