This real estate investment strategy doesn’t work everywhere. There are too many variables that must fall into place first but when the savvy investor does find an area that meets the parameters it’s a gold mine. When housing values began to plummet in force in 2008, within just a few short monthsland values coming back there was a glut of single family distressed properties on the market.

Prices continued to fall for such an extended period that builders and developers sat on the sidelines. Some of those were less than fortunate and found themselves with thousands of unsold, empty homes they could not sell. The market stopped and many were put out of business.

Yet when one investor’s door closes another one always seems to open. As new construction began to fade, lot values in most parts of the country fell to almost nothing. Empty lots, many already subdivided, sat and played the waiting game.

As real estate values over the past couple of years have gradually made their way back meeting the newfound demand, existing homes can be priced higher than what it might cost to build. Lagging land values provide an opportunity to buy and build for less than it would take to buy and rehabilitate. The country isn’t awash with such similar deals but they exist and with a bit of old fashioned due diligence you can find pockets of opportunities where new construction provides greater returns compared to a standard “buy and flip” process.

Building permits and new construction are often lagging indicators as builders don’t want to invest the time and money needed to build a brand new home. They wait for evidence of a coming demand. Yet if you can find an area where lot values are still low and building brand new on that lot will more than cover your profit projections, don’t overlook investing in new construction.