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How to value a property/home in an area potentially slated for future residential development?

I am looking at several homes with large lots in an area that is on the edge of large residential development complexes. The areas I am looking in could be bought out by a REIT and developed.  How would this affect the property value of an individual lot? The lot currently is very affordable, yet the house is in rough shape with minor structural damage.  If purchase at a low price, lived in for 3-4 years without attempting to fix the structural damage or fixing for resale in mind, would the value of the property go up or down from a buy-out? Meaning, would this be a worthwhile investment or could I get stuck if the property value sinks and I owe on the house?  
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November 08 2013 - Fort Mill
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Thanks for all the advice, its really helping me prepare for the largest financial decision in my life. Reading the responses, I think I should refocus my intent on looking at this property.  

Preferably, I would like to buy a wooded parcel 1-3 acres in size that is within 20 miles from my work, and live at the location for at least 6-9 years. However, the only land left available that meets this criteria and is affordable to me is an "undeveloped"  50-60 parcel area with mobile homes or 1950-1960's houses. Everything surrounding this area for miles are large $300k new homes built within the past 10 years.  

My more specific question is this: If I did pursue buying a parcel in this "undeveloped" area, either with an old house already on it, or building a small 800 sq.ft house, what is the likelihood that I would be forced to sell at a fraction of the purchased price if this area is to become developed with mansions as well.  I'm assuming that any structure on the property would be worthless since they'd tear down any old or small home to make way for a 3000 sq ft house.  

Looking at the Zillow history of parcels that I'm interested in, they seemed to have dropped in value by as much as 40% since the 2006.  How much lower would an investor pay at wholesale for these parcels even at the current "rock bottom" pricing?  Could I be zoned out of my land since my house wasn't big enough to new zoning standards?

Thanks for all the advice!  Maybe I should open a new thread asking about a potential $20k 800 sq ft. build on a rural parcel and how that would be affected by potential future investor buy-out.   
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November 17 2013
What adds value to land tends to be time, improvements or changes in use (rezoning). 3 to 4 years is a short time, probably too short. Improvements, like putting in a road, water and sewer is expensive and if you don't have the funds to do it, probably not an option. If you were to assemble a large parcel and rezone it to multifamily, you could likely increase its value in that 3 to 4 year period of time.
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November 14 2013

I have similar situation that I went through on 3.25 acre piece of land that had older home on it, bought it long ago speculating that someday a residential development will happen, few years later it did, my lot will be split into 10 smaller lots, located in the middle of this residential development, the builder have offered me a price to sell, in which I have turned down, later I've got the price I was looking for. So it all depends on how important your location is? and if the kind of development consistent with best and highest use for the area? Meaning are they building apartments, condos, or single family homes, there are many factors involved, your best bet is to go to the planning department and find out what current zoning, and what are the future possible zoning, current application for developments and what are the activities on the area, this will give you an idea if it will be worth the investment or not. If this post was helpful please click the thumbs-up below.

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November 08 2013
There are both retail and wholesale prices for real estate.  The retail price for a home is its current market value.  The wholesale price is a price that a developer would pay for it or another buyer should pay for it if there are no commissions being paid.

Investors will only pay a wholesale price, so that's the price that you should pay for something that you intend to sell to an investor at a later time.

Banking on appreciation isn't a very wise bet. It works for land developers because they have a plan for improvement or adding value to the property.
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November 08 2013
 
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