Lot With Town Water And Sewer
Hello all,
I have a contract on a property that is a house and 2 adjoining lots. I want to rehab the house, and either build a spec. house on the adjacent lots or flip them to a builder. I think the lot could easily be rezoned for a multifamily unit, and the location is ideal for a duplex. I have done the following due dilligence:
I have checked with the town, and the current zoning is residential, which would allow me to build one single family home per lot. I know the lots are served by town water and sewer, and both lots will require no road building, as they both have state road frontage. Are there other items that I should consider as to the feasiblity of what I wish to do? Would having a builder take a look at the lots answer these questions?
Don't know about your municipality, but i haven't yet seen a scenario where changing the zoning is a slam dunk. So I would review the town's comprehensive or master plan to see that land uses they propose for the 2 lots. I would have an off the record conversation with the zoning officer and/or municipal land planner to get a feel for the likelihood of rezoning the property. I would find a local RE attorney who's "plugged" into the community and pick her/his brains about this.
If it appears that rezoning is not likely, I would get a handle on what the new homes on the lots would sell for.
I hope your purchase contract has a feasibility period contingency (and other contingencies) in it.
Do you have to get the extra density to make the deal work? If the house and lots are priced right I'd sure try to make it work for SFR before I threw the dice on a zoning change.
Thanks for the responses. I have checked the town's land use plan, and the area is moving toward multifamily housing. There is a large development planned very close by for an apartment complex. I have had the conversation you referred to, and it seemed doable. The reason I mentioned rezoning for a duplex is I know there is demand for lots with public water and sewer to build duplexes, probably more so than SFH. The homes that would be built on these lots would be modest houses, around 100K. Am I correct that it's less expensive to build on lots with public utilities as opposed to well and septic?
Commercialking--I do not need the extra density to make the deal work...I felt like I could get more for the lots if I had them rezoned. Do you feel like maybe it's more trouble than it's worth?
millionby30,
Given the physical setup you've described, I would agree that your improvement costs here would be less with public W & S. That also takes the guesswork out of how many lots.
But here's the thing--does your purchase contract have time built into it so that you can pursue both rezoning and subdivision approval? Or are you required to close with the seller within a certain period of time?
Again, rezonings can take a lot of time and you don't want to have to close on the property before you have what you need. You may be able to do an expedited subdivision--subdiv. ordinance & municipal engr are info sources.
Probably not an issue, but keep in mind that getting additional curb cuts on a state road is often more difficult than a locally maintained road. Around here the http://www.state.is not a lot of fun to deal with, though they are not impossible.
Nancy--
The contract does not allow for the time it would require to rezone. Therefore, I want to be sure at the very least I could sell the lots for residential. I'm getting the property at a really good price, so selling to a builder should net a fair profit. However, I was considering taking the lots to the next level, ie changing the zoning, to increase the value of the lots and thereby increase my profit. I probably should have been more clear. So with that said, are there any other items of due dillegence I may have overlooked that could make/break this deal as far as the lots go? My main concern is the public water and sewer. I am only familiar with well and septic costs.
Woodsong--
Thanks for your reply. I will take that into consideration.
Insofar as costs for water and sewer, if I understand correctly, each lot would have frontage on the existing street and the lines are in the street. If that's the case, then your engr can estimate the cost for laterals, etc. Have your engr investigate availability of water and sewer permits and the cost. Just because the sewer line's there doesn't mean there's capacity. In other words, verify that there's not sewer moratorium on the horizon.