Buy Vacant Lot and Sell to Drive-In Restaurant?

[Seamster]

I own a vacant rental house which borders a vacant lot of nice grass with a little cement driveway. This lot can be purchased for $250 + $50/yr tax only by a) me, b) the other neighboring landlord who used to own it and let it go back to the city or c) the guy across the street who could have bought it at any time but never has.

Negatives to buying:
1) My future tenant would have to keep the grass cut or I'd be fined (currently the 12 year old kid living in the rental house next to it is cutting the lot. He thinks it's theirs and he plays over there. I could buy it and not tell them I bought it and he'd keep cutting it, but then I'm responsible for a 12 year old with a lawn mower on my land)
2) It has about 4 healthy trees that I'd be responsible for cutting down if they were to start dying ($2k each)
Positives to buying:
1) Slight increase of future tenant's happiness IF they want the extra lot (would not really increase house's value) or
2) I could try to sell lot to restaurant

See map below. The waitresses walk out of the restaurant and serve food to people in their cars. There are 18 parking spots. Sometimes it is 100% full so people park on the street. Waitresses do cross the road, if necessary, but I suppose they really aren't supposed to. If the restaurant owned the lot, they could get it rezoned and pave it, more than doubling their parking. But then the waitresses would need to cross the side street (slight danger) or else they'd need to build a bridge of legal height (14 feet maybe?). The restaurant does surprisingly good business, but I'm not sure they'd even see value in the lot, let alone want to deal with the city or spend $25,000 to pave it. I guess they wouldn't need to pave it, they could just have a sign that says, "Extra Parking," but both of those seem like they'd be against city regulations. I even thought the restaurant owner that could VERBALLY tell people to park there, which customers would remember, and the restaurant could technically use the land as-is (and the city would be none the wiser unless if they actually caught waitresses walking over there and I know the inspector and he doesn't give a sh*t UNTIL someone complains).

It seems like a long shot, actually, but I'm wondering if you guys wouldn't see something I don't. I could approach the owner of the restaurant, but that might set of a chain of them petitioning to buy it themselves for $250. Then I'd regret not buying it...but I don't know if I want to own it anyway. Any clever ideas?

• 

 

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[cviji]

I own a vacant rental house which borders a vacant lot of nice grass with a little cement driveway. This lot can be purchased for $250 + $50/yr tax only by a) me, b) the other neighboring landlord who used to own it and let it go back to the city or c) the guy across the street who could have bought it at any time but never has.

Negatives to buying:
1) My future tenant would have to keep the grass cut or I'd be fined (currently the 12 year old kid living in the rental house next to it is cutting the lot. He thinks it's theirs and he plays over there. I could buy it and not tell them I bought it and he'd keep cutting it, but then I'm responsible for a 12 year old with a lawn mower on my land)
2) It has about 4 healthy trees that I'd be responsible for cutting down if they were to start dying ($2k each)
Positives to buying:
1) Slight increase of future tenant's happiness IF they want the extra lot (would not really increase house's value) or
2) I could try to sell lot to restaurant

See map below. The waitresses walk out of the restaurant and serve food to people in their cars. There are 18 parking spots. Sometimes it is 100% full so people park on the street. Waitresses do cross the road, if necessary, but I suppose they really aren't supposed to. If the restaurant owned the lot, they could get it rezoned and pave it, more than doubling their parking. But then the waitresses would need to cross the side street (slight danger) or else they'd need to build a bridge of legal height (14 feet maybe?). The restaurant does surprisingly good business, but I'm not sure they'd even see value in the lot, let alone want to deal with the city or spend $25,000 to pave it. I guess they wouldn't need to pave it, they could just have a sign that says, "Extra Parking," but both of those seem like they'd be against city regulations. I even thought the restaurant owner that they can VERBALLY tell people to park there, which customers would remember, and the restaurant could technically use the land as-is (and the city would be none the wiser unless if they actually caught waitresses walking over there and I know the inspector and he doesn't give a sh*t UNTIL someone complains).

It seems like a long shot, actually, but I'm wondering if you guys wouldn't see something I don't. I could approach the owner of the restaurant, but that might set of a chain of them petitioning to buy it themselves for $250. Then I'd regret not buying it...but I don't know if I want to own it anyway. Any clever ideas?

• 

I'm not sure on the drive in restaurant idea in the post covid world but is the lot not really cheap regardless of what is done with it? Are you free to sell it on after purchasing and what would it be worth on the open market? Would it be worth anything as a building plot? Car wash?

 

[vinylawesome]

I'm not sure where this is located but buying a lot for $250 doesn't seem like a terrible risk. Just keep it quiet and buy it. Worst case scenario you can sell it to someone else for more than $250. Perhaps keep the lot and lease it out for RV/Boat parking, etc? I don't know the zoning but perhaps keep the land for land lease income or owner finance it to someone else.

 

[ZCP]

buy it for the challenge of figuring out how to create value with it.

 

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[Ing]

I d buy it, build garages and rent them out.
But sure I would buy it.
A robot mower is not expensive.

 

[Seamster]

I'm not sure on the drive in restaurant idea in the post covid world but is the lot not really cheap regardless of what is done with it? Are you free to sell it on after purchasing and what would it be worth on the open market? Would it be worth anything as a building plot? Car wash?

The drive-in has been there for years and isn't going anywhere. Yes, after I buy the land I'm free to sell it. It's not worth anything. If it were you or anyone else can petition the city to buy it for $250. Before the city can sell they will contact me, old guy, and neighboring landlord to see if we want to buy it first. That's why I know no one is interested. There are a few hundred vacant lots like this around the city.

I'm not sure where this is located but buying a lot for $250 doesn't seem like a terrible risk. Just keep it quiet and buy it. Worst case scenario you can sell it to someone else for more than $250. Perhaps keep the lot and lease it out for RV/Boat parking, etc? I don't know the zoning but perhaps keep the land for land lease income or owner finance it to someone else.

Yeah, the money is nothing. The risk is getting stuck with it and have to worry about the trees, keeping the grass cut, and whether someone gets hurt on the property.

Leasing the land for RV/boat parking is actually a great idea. I'm sure I could store a couple things there without the city noticing if I put up a 6 ft fence. But, it's residential and not really the type of area for such things.

buy it for the challenge of figuring out how to create value with it.

Oh no, that's what we're doing now...before there's any risk!

I d buy it, build garages and rent them out.
But sure I would buy it.
A robot mower is not expensive.

Having to run over there once a week to cut grass or even worse drop off a mower then go pick it up doesn't fit into my plans of an automated business. I have enough trouble going to the PO box once a week!

Building on it isn't an option for any type if income generation. There already was a house there, which was torn down. I would have preferred to get the house with the lot. Maybe there was a fire or something, I don't know. I didn't see the property for sale on the tax auction or, maybe I did and it was just too bad so needed to be demolished. The city has demolished 100s of houses in the past 10 years. I've rescued a few of those from the same fate and put nice families into them

 

[WJK]

I own a vacant rental house which borders a vacant lot of nice grass with a little cement driveway. This lot can be purchased for $250 + $50/yr tax only by a) me, b) the other neighboring landlord who used to own it and let it go back to the city or c) the guy across the street who could have bought it at any time but never has.

Negatives to buying:
1) My future tenant would have to keep the grass cut or I'd be fined (currently the 12 year old kid living in the rental house next to it is cutting the lot. He thinks it's theirs and he plays over there. I could buy it and not tell them I bought it and he'd keep cutting it, but then I'm responsible for a 12 year old with a lawn mower on my land)
2) It has about 4 healthy trees that I'd be responsible for cutting down if they were to start dying ($2k each)
Positives to buying:
1) Slight increase of future tenant's happiness IF they want the extra lot (would not really increase house's value) or
2) I could try to sell lot to restaurant

See map below. The waitresses walk out of the restaurant and serve food to people in their cars. There are 18 parking spots. Sometimes it is 100% full so people park on the street. Waitresses do cross the road, if necessary, but I suppose they really aren't supposed to. If the restaurant owned the lot, they could get it rezoned and pave it, more than doubling their parking. But then the waitresses would need to cross the side street (slight danger) or else they'd need to build a bridge of legal height (14 feet maybe?). The restaurant does surprisingly good business, but I'm not sure they'd even see value in the lot, let alone want to deal with the city or spend $25,000 to pave it. I guess they wouldn't need to pave it, they could just have a sign that says, "Extra Parking," but both of those seem like they'd be against city regulations. I even thought the restaurant owner that could VERBALLY tell people to park there, which customers would remember, and the restaurant could technically use the land as-is (and the city would be none the wiser unless if they actually caught waitresses walking over there and I know the inspector and he doesn't give a sh*t UNTIL someone complains).

It seems like a long shot, actually, but I'm wondering if you guys wouldn't see something I don't. I could approach the owner of the restaurant, but that might set of a chain of them petitioning to buy it themselves for $250. Then I'd regret not buying it...but I don't know if I want to own it anyway. Any clever ideas?

• 

I would probably buy it to get control and I'd mow it or get it mowed.

Running an escrow and getting title insurance would cost more than the $250 purchase price you quoted. But, that's the only way I know to get a clear, defendable title to real property.

Does it have utilities available? Which street is used for access and the street address? That's critical to its value and use.

What is the zoning on the lot? That will control what can be done with it. Is it residential or commercial? I would study the planning map to find out what can be done with it. Then, the next task is to learn the building requirements and restrictions for that zoning and area. Since it's a corner lot, you'd have to pay particular attention to the frontage building setbacks for both streets to figure out the potential buildable footprint.

From your sketch, the drive-in across the street may be a grandfathered use since the other adjacent properties appear to residential in nature. Will the Planning Department and/or Building & Safety Department allow a commercial use for the subject property -- the lot -- such as parking for the restaurant? What improvements would they require, on what timeline? If it can be done, can you lease it to the restaurant rather than sell it?

I'm probably getting too technical for you. My past professional RE training is showing -- but I'm not giving you professional advice here. I'm only telling you what I would explore as a private party either purchasing or looking at a vacant property. The challenge is to figure out what is possible for the property and if it fits into your life and plans.

 

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[Seamster]

Well, some time has passed on this but one day another solution came to me. This is residentially zoned lot. They can't have customers over there without zoning, insurance, etc. I've never ran a restaurant but I assume there's a lot of that which much be considered.

So, I'm going to propose to the owner that he can buy the lot for EMPLOYEE PARKING! Since it's a drive-in restaurant with 3 cooks and 3 waitresses, that would give them 6 empty parking spots. Best bet would be to rent it to him for >$500/mo. I assume the extra spots would get him an extra $50-100 per day because customers would see empty spots and come in more, maybe. Or I could just sell it to him. We'll see what happens!