Possible Land Development

Comments(4)

• 
  Ruman19th January, 2005

  I do not see how you could make as much money as you should paying $150k an acre for land to build 6 $200k lots. In my area, paying $35k for a developed lot for that price of house is average. Your cost will be:
  
  $38,000 purchase price per lot
  $10k-$15k per lot for development costs.
  
  $50k or so per lot that will really eat your profits.
  
  Also, if future use is office or light commercial, why would you put homes there?
  
  Quote:
  On 2005-01-19 17:29, thecaspegroup wrote:
  What would you do with this opportunity?
  
  $229,000 asking. Acreage in the path of development. Total 1.769 acres zoned RSF 4.5. Future Land use includes light commercial, professional, office. Price Includes small house (see below). As Is. Possible Rezone To Commercial.
  
  1953, 952 SF, 2/1 home, gutted. Needs work.
  Near fire station
  Construction Concrete Block
  Cooling None
  Heating None
  Sewer Type Septic System
  Water Supply Central Water
  
  I see tearing the house down, adding a cul-de-sac road, dividing into 6 lots, and partnering with a builder to build 6 homes, taking a share of each. It is a high price housing area. Nearby homes sell for mid $200k up so I would look at small low $200k homes. Any thoughts?.
  
  TPW
  
  [ Edited by Ruman on Date 01/19/2005 ]

• 
  Faerl19th January, 2005

  I tend to agree. Looking at each lot individually you'd have the following :
  
  220k sales price per home
  -38k for the land per home
  -170k to build the houses (total guess and likely too low)
  --------
  16k left over (x6 of course)
  
  Of that amount left over though there's money that's going to go into the cul-de-sac etc as well as the profits the builder is going to expect. Before I'd go farther I'd get some hard numbers from the builder on what their cost per home is and what profit numbers they'd expect to see if you were to bring a deal to them. I'd also look into the commercial angle further.

• 
  thecaspegroup19th January, 2005

  Thanks for the input. I realize that $229 is too high. I would offer $200k. If I can get the property under contract perhaps I can flip it to a developer for $10k and let them take the profits and costs since they probably can do it efficiently.
  
  Thanks Again

• 
  goodloe19th January, 2005

  Buy the property and sit on it till the developers come looking for you. They pay what its work maybe even a little more if they need it. Its less of a headace to you and your going to make a profit for the wait.