I bought a house with an adjoining vacant lot for $65,000. I had the parcel split off prior to closing and obtained a 95% first mortgage on the lot with the house. The seller paid closing costs and and paid me $5,000 to remove a tree from the vacant lot, as a condition of the sale.
I had a bread and butter 3 bedroom, 2 bathroom house with a full basement built on a vacant lot. My total construction and carrying costs were $60,000. I sold the house on a lease option for $115,000 with a $15,000 down payment and monthly rental payment of $900 per month for two years (client had bad credit and needed two years to re-establish employment and credit record).
I rented the original house for $800 per month for two years and then sold it for $72,000.
My profit on the new house was $45,000 plus $500 positive monthly cash flow for two years. My profit on the original house was $7,000 plus $350.00 positive monthly cash flow for two years.
If you're willing to use the strategies, they do work. Be creative.