Just Out Of Curiosity
Hello all,
I'm brand new to REI, and haven't even started looking at commercial property yet, however..... (You figured there'd be a "however" didn't you?)
Every day I leave my house and go to work, I've been passing 3 houses for sale on the corner of a very busy and congested intersection. They are all for sale. Yes, I know this is the commercial forum, hold that thought.
I finally pulled up their info on the MLS and they are all selling for $99,900, BUT are all zoned CS. They are cute houses, but are very small, built in the '20s and are each sitting on 1-1.5 acres of land.
Ok.. getting to the question part.. Are these something that a developer would be interested in to snatch up and open a mini-strip mall or something on? If so, how do you approach the land owners and tell them that their house is WAY overpriced for the zoning they are in? Or are they? Like I said, I'm green.
Anyways, they've all been on the market for about 5-6 months and its bugging me driving by them everyday thinking I'm missing the boat on an opportunity.
Am I?
Perhaps you are. Three pieces of information can be pretty helpful.
1) Just how busy is the interesection? If you go to your local department of planning (or whatever name they give it there) and ask for traffic count information on the corner they should be able to provide you with that information, it may be a little old but they do compile such things.
2) What can be built on a CS zoning in your area? What are maximum allowed Floor/ parking ratios?
3) With these two pieces of information you can start getting comps. What have similar sized CS lots with similar traffic counts sold for in your area?
So these houses have between 3 and 4.5 acres of land? If the zoning issue works $30,000 per acre is cheap for a corner strip mall lot..
Sometimes a lot is worth more without the buildings:
A buddy of mine about a year ago bought this very old, very ugly hardware store. Knocked down the building figuring he would build something on it. On a fling he put up a sign saying "for sale" on the vacant lot. The phone wouldn't stop ringing. Eventually he sold the lot for a profit over $500,000. All just for knocking down an ugly building.
You might not need to build the center yourself. Simply demolishing the houses so that others can see the potential of the lot may make it possible to make a nice profit.
By the way, good eye. Its seeing those kind of change-of-use opportunities that make this a really fun business. Whether it works out or not think about how many people drove buy that intersection every day and never saw the deal.