Buy and hold the parcel yourself or assign it and move on

Question

I've been researching land mostly as something to hold, and the more I read the wholesaling side the less obvious the choice gets.

Assign it: no capital tied up, no property taxes, no mowing or trespass or dumping, fee lands in weeks. The chapter's whole case is minimal holding cost and low barrier to entry, and that's real.

Hold it: if a parcel is genuinely available at a fraction of market value, handing the whole spread to a builder for a 10k fee is a choice. Taxes on raw rural ground can be small, there's nothing to maintain in the way a house needs maintaining, and the demand story people describe, movement toward less dense areas and development at the exurban edge, is a holding story more than a flipping story. The downside is you're carrying an illiquid thing with no income and paying to do it.

Middle version is owner financing it out yourself, which turns the parcel into income but makes you a note holder with all that involves.

I don't know how to weigh the fee you get now against the appreciation you might get later, especially when the appreciation part isn't something anyone can promise. Where does the room come out?

gregpowell66 · Answer

Arbor, from the construction side the thing I'd add is that holding land at the exurban edge means holding it through whatever the county does with zoning and utilities. I've watched parcels sit for years waiting on a sewer extension that got voted down twice. That's not appreciation, that's a bet on a public works schedule. The assignment fee has the advantage of being a number you actually receive.

mitchell_ray4 · Answer

Trades background, coming at the investing side new. What gets me about holding is the boring stuff. Somebody dumps tires on your 20 acres and it's your problem, and clearing that isn't cheap. Girder, does the utility timing thing show up in how builders price the parcel, or do they just not bid until it's in?

marcus_hale41 · Answer

I do a lot of due diligence on passive positions and I'd frame it as two different businesses that happen to share a lead source. Wholesaling is a labor business, your return is a function of how many parcels you touch. Holding is a capital business and your return depends on things you don't control, county planning being the big one Girder named. Arbor, the middle version you mentioned deserves more weight than you gave it. Selling with owner financing on land is common and it does produce income, but you become a lender, which pulls in state specific rules on the note, the disclosures, and how you service it. That's a conversation with an attorney in the state where the parcel sits before you write the first note, not after. Solder, on your question, most builders I've read on won't put a real number on a parcel until utilities are committed, which is exactly why the ones that are already served trade tighter.

Buy and hold the parcel yourself or assign it and move on

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