How to Wholesale New Construction Deals: Lots, Pre-Sales, and Builder Deals
Most wholesalers focus on existing homes, ignoring a lucrative niche: new construction deals. Wholesaling lots to builders, connecting builders with investors, and facilitating new construction transactions can generate $15K-$50K+ assignment fees. This guide covers how to enter this space.
Types of new construction wholesale deals
Lot wholesaling
Find buildable lots at below-market prices and assign them to builders or developers. Builders need a constant supply of lots and will pay a premium for shovel-ready parcels (cleared, utilities accessible, permits obtainable).
Teardown deals
Find older homes on valuable lots in desirable neighborhoods. The value is in the land, not the structure. Builders tear down the existing home and build new. The ARV of a new build on the lot determines the deal economics, not the ARV of the existing structure.
Spec home pre-sales
Some builders will sell spec homes (built on speculation, not for a specific buyer) at a discount before completion to reduce their risk. You can get these under contract and assign to end buyers or investors.
Finding lot and teardown opportunities
- Vacant land owners: Use the same land wholesaling strategies to find lot owners willing to sell below market
- Expired lot listings: Lots that sat on the MLS for months without selling — the owner may accept a lower price
- Tax-delinquent lots: Land owners who have not paid taxes are often willing to sell cheap
- Estate/probate lots: Inherited lots that heirs want to liquidate
- Neighborhoods with teardown activity: Look for areas where older homes are being demolished and replaced with new construction — there is builder demand
Building relationships with builders
Builders are your primary buyers for new construction wholesale deals. Building relationships with them requires understanding their business:
- What builders need: A consistent supply of lots at prices that allow profitable new builds. They evaluate lots based on what they can build and sell, minus construction costs and land cost.
- Where to find builders: New construction permit records (public at the county level), home builder association meetings, model home visits, and referrals from building supply stores.
- What to present: Lot dimensions, zoning, utility access, soil conditions (if available), comparable new construction sales in the area, and your asking price.
Analyzing new construction economics
Builder's Formula:
Maximum Lot Price = New Build ARV - Construction Costs - Soft Costs - Builder Profit
Example: If comparable new builds sell for $450K, construction costs are $200K, soft costs (permits, plans, utilities) are $30K, and the builder wants a 15% profit ($67.5K), the maximum lot price is $152.5K. If you can get the lot under contract for $100K, there is $52.5K of margin to split between your assignment fee and the builder's cushion.
Due diligence for lots
Lot deals require different due diligence than house deals:
- Zoning verification: Confirm the lot is zoned for the intended use (residential, specific density)
- Utility access: Water, sewer, electricity, gas — are they at the lot line or require extension?
- Soil and topography: Flat, buildable soil is essential. Steep grades, rock, or wetlands add significant costs.
- Flood zone: Check flood risk — lenders and buyers avoid flood zones for new construction
- Setback and building envelope: How much of the lot can actually be built on after setback requirements?
- HOA restrictions: Some HOAs have architectural review requirements that limit what can be built
Related guides
- How to Wholesale Land
- How to Assess Flood Risk
- How to Calculate ARV
- Building Your Buyer List
- The Complete Wholesaling Guide