I rarely buy a piece of property with the idea of just seeing what will happen. I always have a plan or exit strategy for what I’m going to do with the deal. I consider terms, improvements, and how long I’m going to keep it, but I always have a backup plan in case something goes wrong with my initial plan.
For example, I might buy a parcel of raw land with the idea that I’ll get it entitled and flip it to builder. One aspect of my backup plan is the due diligence period, which would let me back out of the deal if I can’t get the entitlements I want. I’m also always prepared to do the building if I have to.
So, if I can’t find a buyer, I know going into the deal that I have a plan to create a product that will be profitable. Of course, I’ll have to put a little more work into it, but I’ll get my money back and make a profit.
A few other items you should be aware of when making offers on raw land or any other real estate purchase is; With raw land it’s a good idea to check with your local chamber of commerce or City inspectors office to find out if there are any easements or other pending possible violations against your offered property. If so, this could be a hindrance on your offer or contract as a whole. This does not mean you have to back out or walk away from the deal, however, it does mean you should reconsider your current position and make any changes necessary in order to make the deal a successful one for all parties involved. It’s always nice to have a local Realtor available to perform any searches you may want or need in order to continue with the deal.
Common sense and doing your homework for every deal you pursue is a must. By doing so, this will, in the long run save you both time and money.