Cheap vacant lots come in two flavors: lots that are cheap because the neighborhood hasn’t turned yet, and lots that are cheap because nobody will ever pull a permit on them. Buying vacant lots at auction profitably comes down to telling those two apart before you bid, then pricing the buildable ones off what a homebuilder can afford to pay rather than off land comps.
Yoganand “Yogi” Ganeshram has been buying tax deed and foreclosure lots around Orlando for two decades alongside a brokerage and flip business. He’s watched investors pay $10,000 to $15,000 at auction for parcels in subdivisions with no roads and no path to a building permit — parcels the public record already flags as unbuildable.
Below is the pre-bid checklist he uses, the builder-margin math that sets a real ceiling on what a lot is worth, two of his actual lot-to-lot price runs with hold periods, and the double-wide screen he applies before anything else.
Key takeaways
- A lot’s width against the county minimum is the first kill switch — if the county requires 100 feet of frontage and the parcel is 60 or 75, you either assemble two lots or you own dirt you cannot build on.
- Price the lot backwards from the builder: at roughly $140–$150 per square foot, a 1,500 sq ft spec house costs about $200,000–$250,000 to build and retails near $375,000–$380,000, which is what lets a lot at $50,000–$60,000 still pencil.
- Nothing happens to infill lot values until someone builds and sells one house on the street. In Poinciana, tax-auction lots bought at $2,500–$3,000 were trading at $50,000–$65,000 within about two years once builders proved out spec sales.
- Screen auction and tax default lists for double-wide or grandfathered combined parcels first — a 100-foot-wide lot in a street of 50-foot lots often clears at single-lot pricing and splits into two salable lots.
- Listing agents do not always know a parcel is landlocked. The public record and the county, not the agent, are your source of truth on access and buildability.
From the Real Estate Pros Show
This article draws on an interview with Yoganand Ganeshram of orlandosgreatesthomes.com on the Real Estate Pros Show, hosted by Dylan Silver.
Why Cheap Lots Are Cheap: Two Very Different Reasons
There are two reasons a lot sells for $10,000 at a tax deed or foreclosure sale, and only one of them is an opportunity.
The first is timing. Central Florida has entire platted subdivisions where the roads are in — paved roads, not dirt — utilities are nearby, a full community sits a mile down the street, and yet individual lots still change hands at $15,000 to $20,000 because nobody has built there yet. That’s a quarter-acre to half-acre buildable parcel at a price that barely exists in most of the country. The discount is waiting for a catalyst.
The second reason is a permanent defect. Ganeshram describes watching investors pay $10,000 to $15,000 at auction for lots in neighborhoods with no roads at all, where the public record already states the parcel can’t be built on.
They’re like for dirt bike, leisure. People are paying 10 to 15 grand where you could take that 10 to 15 grand and buy land that’s actually right off a paved road.
Same money, same auction, radically different asset. The unbuildable lot has no builder bid behind it, which means the only exit is another uninformed buyer.
So the discipline is straightforward even if the work isn’t: your entire pre-bid job is deciding which of those two you’re looking at. Everything else — the price you’re willing to pay, the hold you’re underwriting, the exit you’re counting on — depends on getting that one question right. He is blunt that land is not automatically safe. You can lose money on dirt if you don’t understand what you bought.
The Pre-Bid Buildability Checklist for Vacant Lots at Auction
Run these checks against the county and the plat before you register to bid, not after you win. Each one can independently disqualify a parcel.
- Minimum lot width. This is the most common killer. If the county requires 100 feet of frontage and the parcel is 75 feet, you cannot build. If it’s 60, you cannot build. Your only route is buying the adjoining lot and combining them — which changes your basis and your timeline entirely.
- Setbacks and usable depth. Front and rear setbacks eat into a shallow lot fast. Confirm the parcel has enough depth left inside the setback envelope to hold a house footprint a builder actually wants.
- Developable area versus wetland. Acreage on the tax card is not buildable acreage. You need to know how much of the parcel is high and dry.
- Infrastructure status. Is the lot platted and permit-ready, so a builder can clear and start, or does it need infrastructure built? Infrastructure cost is exactly what builders are trying to avoid when they buy individual lots.
- Legal road access. Confirm the parcel has it in the record. Ganeshram’s point on this one is worth repeating: an agent may tell you a lot is buildable with access and be wrong. Listing agents don’t always know a parcel is landlocked.
Verify every item with the county planning or zoning department and the recorded plat. Requirements vary by jurisdiction and by zoning district within a jurisdiction, and they change. Treat any secondhand answer — an agent’s, a wholesaler’s, an article’s — as a lead to confirm rather than a fact.
If you don’t understand what the county requirements are in a neighborhood to build — the setbacks, whether the land has to be 100 feet wide — if it’s 75, you can’t build. If it’s 60, you can’t build. That’s when you will get burned buying land.
— Yoganand "Yogi" Ganeshram, orlandosgreatesthomes.com
Pricing a Lot Backwards From Builder Economics
Land price has a direct relationship to what a builder can pay, so you solve for the builder’s margin first and back into your bid. Land comps tell you what other people paid; builder math tells you whether there’s a buyer at all.
Ganeshram’s worked example from the Orlando market: construction at roughly $140 to $150 per square foot, so a 1,500 square foot house costs somewhere around $200,000 to $250,000 to build. If that finished house retails at $375,000 to $380,000, a builder can pay $50,000 to $60,000 for the lot, land the total cost near $250,000 to $300,000, and still have a margin worth taking the risk for. That’s what makes a lot at $50,000 a real number rather than a hopeful one.
Reverse the sequence for your own bid. Take the retail price of a spec house the market will actually absorb, subtract build cost at current per-foot pricing, subtract the builder’s required profit, and what’s left is the ceiling any builder will pay for the dirt. Buy meaningfully below that.
The market-structure piece matters as much as the arithmetic. Since roughly 2010 in Orlando, builders have been buying individual platted lots and putting up individual homes instead of only developing whole communities, because a platted lot with roads already in means no infrastructure cost. That shift is what creates a retail bid for a single lot. In a market where builders only buy raw acreage for full subdivisions, your one lot has no institutional buyer and the math above doesn’t apply.
What the Hold Actually Looks Like: Two Real Lot Runs
These are outcomes from specific parcels in a specific market during a specific demand shift. Treat them as illustrations of the mechanism, not as returns to underwrite.
Poinciana, Village 8 and 9. Before the Puerto Rico hurricane, Ganeshram was buying platted lots there at tax auction for $2,500 to $3,000. Two years after the hurricane, those same lots were selling for $50,000 to $65,000. The driver was a population shift into the area combined with builders putting up individual spec homes and selling them at what was the cheapest price point in the greater Orlando market. A separate lot he bought four years ago at $10,000 sold last year for $248,000.
The self-directed IRA run. A client had $26,000 sitting in an old employer 401(k). He rolled it to a self-directed IRA and deployed it into Poinciana lots at $12,500 each. About three years later those lots sold at roughly $65,000 apiece, and the proceeds were recycled into ten to twelve lots in another community at around $12,000 each.
The pattern underneath both is the catalyst, and it’s the only part that generalizes: nothing happens until someone builds and sells one house on the street. A subdivision can sit at $15,000 a lot for years. Then one or two builders prove a spec house works there, and lots move to $40,000 or $50,000 because a repeatable exit now exists.
That means your hold isn’t a fixed number of years. It’s however long it takes for a builder to prove the neighborhood — which is why lot selection has more to do with proximity to active building than with the price you paid.
The Lot-Split and Double-Wide Play
When Ganeshram scans an auction list or a tax default list, his first screen isn’t price. It’s finding parcels that are double-wide, or two lots that were combined or grandfathered together at some point.
The mechanic is simple arbitrage on how auctions price parcels. Take a street where the standard lot is 50 feet wide, with one 100-foot-wide parcel sitting in the middle of it. At auction, that parcel frequently clears at roughly what a single lot goes for, because bidders price the tax bill and the street, not the frontage. Split it and you own two salable lots for one purchase price.
Width standards are what make this work. In a subdivision where the county minimum is 50 feet, a 100-foot parcel is two conforming lots. That same 100 feet in a district requiring 100-foot minimums is one lot and always will be — no split, no arbitrage, and you’ve paid a premium for depth you can’t monetize.
The play also fails if the recorded plat won’t support the division, if the parcel was legally combined in a way that requires a replat, or if the split triggers requirements the lot can’t meet, like setbacks or utility connections per lot. Confirm the split is administratively possible with the county before you bid, because the split is the entire thesis. If it doesn’t go through, you own one lot at a two-lot cost basis.
Land vs the Alternative: Where This Fits in a Portfolio
Ganeshram’s pitch to newer investors is a comparison, not a promise: a $10,000 to $20,000 buildable lot as an alternative to putting the same money in a single stock and hoping it becomes the next NVIDIA. He grew up in Guyana, and quotes his grandfather — “there’s two things you never lose money on, dirt and gold.” He immediately qualifies it. You can lose money on land. You just have to understand what you’re buying, which is the entire point of the checklist above.
The cost-direction argument behind his multi-year hold thesis is worth understanding because it’s a replacement-cost argument, not a demand argument. He’s watched material prices spike and then only partially retreat — Home Depot pricing running up sharply after tariffs and coming back down only part of the way. If build costs ratchet up over time rather than round-tripping, the cost of producing new housing rises, and land that can legally accept a house tends to follow.
The unglamorous part is sourcing. He pulls his own lists rather than buying them — MLS and county public records, filtered for lis pendens filed in the last 90 days, then cross-checked against the court docket to confirm the case is still active before he reaches out. And he’s direct about why most people don’t sustain it: send 15 emails a day for five days a week with no results for 30 days and most quit. Knock 20 doors on a Saturday, get five leads, close none, and most don’t go back the next Saturday. The deals come from the people who do.
Frequently asked questions
How can I tell before an auction whether a vacant lot is actually buildable?
Check five things against the county and the recorded plat: minimum lot width versus the parcel’s actual frontage, front and rear setbacks versus the parcel’s depth, how much of the acreage is high and dry rather than wetland, whether infrastructure and paved road access already exist, and whether the parcel has legal road access at all.
Do this with the county planning department and the public record, not with the listing agent. Ganeshram’s warning is that agents don’t always know a lot is landlocked, and the record is the only source of truth. Auction lots are typically sold as-is with no contingency period, so anything you don’t verify before you bid, you own.
What is a fair price to pay for a lot if I want to sell it to a builder?
Work backwards from the builder’s economics rather than from land comps. Start with what a spec house on that lot actually sells for, subtract the cost to build it at current per-square-foot pricing, subtract the profit the builder needs to justify the risk, and the remainder is the most any builder will pay for the dirt. Your bid needs to sit well below that ceiling.
In Ganeshram’s Orlando example, a 1,500 sq ft house at $140–$150 per foot costs roughly $200,000–$250,000 to build and retails around $375,000–$380,000, which supports a lot price of $50,000–$60,000. Run the same three lines with your own market’s retail and build numbers.
How long should I expect to hold a cheap infill lot before there’s a buyer?
It depends entirely on when a builder proves the street, not on a calendar. Ganeshram’s point is that a platted subdivision can sit at $15,000 a lot for years, then reprice to $40,000 or $50,000 once one or two builders put up spec homes and sell them there.
His actual holds ran two to three years, but both coincided with a demand catalyst — a population shift into the area and builders finding the cheapest new-construction price point near Orlando. If you buy where no builder is active and none is coming, the hold is open-ended. Underwrite carrying costs and property taxes accordingly.
Can I buy vacant land inside a self-directed IRA, and what are the restrictions?
Yes — Ganeshram describes a client rolling $26,000 from an old employer 401(k) into a self-directed IRA and buying Poinciana lots at $12,500 each inside it. Many custodians now act purely as custodian while the account holder forms an LLC tied to the IRA and writes the checks.
The restrictions he flags are the ones that trip people up: you cannot commingle funds — no paying expenses out of your personal pocket — and you cannot do sweat equity on the property yourself. Violations carry penalties. Confirm the specifics with your custodian and a tax professional before you fund anything, because prohibited transaction rules are unforgiving and this is not legal or tax advice.
What makes a double-wide lot worth more than two separate lots at auction?
It isn’t worth more — it’s worth the same as two lots but frequently sells for the price of one. That gap is the play. A 100-foot-wide parcel sitting among 50-foot lots often clears at single-lot pricing at auction, and a lot split then produces two salable lots for one purchase price.
It only works where the county’s minimum lot width is small enough that the split yields two conforming lots and the plat supports the division. In a district requiring 100-foot minimums, that same parcel stays one lot permanently. Verify the split is administratively possible before bidding.
The bottom line
Before your next auction, pull the plat and the county’s zoning requirements for every parcel on your list and eliminate anything that fails on width, setback depth, or legal access — then price whatever survives off builder margin, not off what the last lot on the street traded for.
