Building Question - Posted by JG-PA

Posted by ray@lcorn on February 25, 2003 at 16:25:16:


Is the property already in two parcels? If not, you’ll first need to determine that the property can in fact be subdivided. Even if it is already two parcels you need to verify that it can be built on under the current zoning ordinance. Those ordinances change, so make sure you have current information. Check with the planning and zoning folks in the locality to get the answer to that.

Once I knew the parcels were separate I would finance the lot with the sheds separately from the vacant lot. Then the vacant lot is free and clear, and you can either get a construction loan for 100% of the cost of improvements, or sell it to a builder as a developed lot. Unless they have a ready buyer, most builders will ask you to subordinate the purchaxse price of your lot to their construction loan, then everyone gets paid when the house sells.


Building Question - Posted by JG-PA

Posted by JG-PA on February 25, 2003 at 15:18:30:

I have a property with some storage sheds on it with a nice empty lot also that can be built on.
I’ve worked the numbers out so that I could cash flow about 92.33/month on the storage units alone, but how would I go about building a home on the lot and/or selling to a builder after I buy. This deal might be out of my league for a first deal because I’m clueless about building and/or the feasibility of someone purchasing a lot like this in the city to build on, but I thought I’d throw it out here and see what you guys would do. Thanks
Here are the numbers for reference:
Ask Price:27500 but very motivated seller, will probably take MAO of 20000
Vacancy @5%=218 (which may be low for storage units?)

Gross Rents=4560
Cap Rate=8%
Projected Debt Service @:
PMT=119.83 (1438 annually)