From: joeygibb@aol.com (Just me)
Newsgroups: misc.invest.real-estate misc.invest.stocks misc.invest misc.consumers.frugal-living misc.consumers.house
Subject: Let me get your opinion
Date: 13 Oct 2003 11:06:57 -0700

Hello,

I am 29 years old and own a house. I don't have any other debts except
my mortgage. I am planning to pay off my house in 15-20 years or so.
I am putting 12% of my income in my 401k and also save some every
month.

A builder is selling 1-acre lot for 80K. All the houses around this
lot are selling anywhere between 300K - 700K. The lot is located in
one of the best area of this town. There is no time limit when someone
has to build on this lot. The only requirement is that if construction
is started, it must be completed with in a year.

I asked a real estate agent gave me his opinion why the builder is
selling the lot and he offered me the following opinion :

1.) Demand for those size houses is low and doesn't want to hold that
lot unnecessarily
2.) He needs the cash flow

The real estate market has been appreciating in this town around 5-6%
for the last 10 years and buildable lots have appreciated anywere from
10-15%/year.

Right now the market seems to favor buyers but I think in the long
term (5-10 years) the average return will be around 5-6% a year. This
is my opinion and I may be wrong.

I am considering buying this lot but currently I don't have any
intention to build on this property. However, I am willing to keep it
5-10 years and sell it for a profit.

The tax on this lot is about 200.00/year


Is there another factor I should consider before making decision to
buy this lot?

PS - If I do buy this lot, I will finance 80% of the value of the lot