NEW: BP Podcast 66: Flips, Apartments, & Protecting Yourself From Professional Tenants with Michael Blank

Hide this

From the BiggerPockets Blog

 BiggerPockets Blog »

Jump to Forum View All

Click a category below to view different forum categories.


General Info

BiggerPockets Q&A, Site Questions, & Announcements

1515 topics, 14401 posts — Last Post 04/19/14, 04:46AM

BiggerPockets Exclusive PRO Area

117 topics, 839 posts — Last Post 04/18/14, 05:47AM

New Member Introductions

10886 topics, 85618 posts — Last Post 04/19/14, 04:58AM

Real Estate Success Stories

396 topics, 6154 posts — Last Post 04/19/14, 04:10AM

General Real Estate

General Real Estate

Buying & Selling Real Estate

5935 topics, 46774 posts — Last Post 04/18/14, 11:05PM


643 topics, 5815 posts — Last Post 04/19/14, 03:38AM

Get Foreclosure Help - Help Stop Foreclosure Forum

316 topics, 2557 posts — Last Post 04/16/14, 03:58AM

Home Owner Association (HOA) Issues & Problems Forum

237 topics, 1609 posts — Last Post 04/17/14, 08:53AM

Do it Yourself

654 topics, 6264 posts — Last Post 04/19/14, 01:54AM

Reviews & Feedback

Real Estate Deal Analysis and Advice

3674 topics, 29452 posts — Last Post 04/19/14, 04:13AM

Real Estate Guru, Book & Course Reviews and Discussions

1133 topics, 11558 posts — Last Post 04/18/14, 11:03PM

Ask About A Real Estate Company

740 topics, 7318 posts — Last Post 04/18/14, 11:52AM

Real Estate Investing

Real Estate Strategies


5603 topics, 43740 posts — Last Post 04/19/14, 04:24AM

Rehabbing and House Flipping

3333 topics, 30990 posts — Last Post 04/19/14, 04:50AM

Real Estate Development & New Home Construction

553 topics, 4683 posts — Last Post 04/18/14, 10:25PM

Innovative Strategies

703 topics, 6027 posts — Last Post 04/18/14, 08:48AM

Tax Liens, Notes, Paper, & Cash Flows Discussion

866 topics, 6677 posts — Last Post 04/18/14, 11:42PM

Rent to Own a.k.a. Lease Purchase, Lease Options

691 topics, 4871 posts — Last Post 04/18/14, 03:32PM

1031 Exchanges

143 topics, 1054 posts — Last Post 04/18/14, 08:41AM

Foreclosure Investing

General Foreclosure & Pre-Foreclosure Forums

1686 topics, 11285 posts — Last Post 04/18/14, 01:32PM

HUD, VA, and Tax Sales

414 topics, 3089 posts — Last Post 04/18/14, 12:05PM


1214 topics, 10570 posts — Last Post 04/17/14, 02:28PM

Short Sales

1534 topics, 13120 posts — Last Post 04/17/14, 04:44PM

Landlord & Tenant Forums

Landlord & Rental Property Questions

7201 topics, 70739 posts — Last Post 04/19/14, 04:55AM

Mobile Homes & Mobile Home Park Investing

638 topics, 5140 posts — Last Post 04/18/14, 03:22PM

Investor Basics

Starting Out

7699 topics, 60435 posts — Last Post 04/19/14, 03:35AM

Investor Psychology

431 topics, 6104 posts — Last Post 04/18/14, 06:08PM

General Real Estate Investing

4716 topics, 37183 posts — Last Post 04/19/14, 02:53AM

Real Estate Investor Marketing

1731 topics, 14093 posts — Last Post 04/18/14, 11:12PM

Commercial Real Estate

Commercial Real Estate Investing Forum

1410 topics, 8985 posts — Last Post 04/18/14, 10:17PM

Multi-Family and Apartment Investing

1109 topics, 9224 posts — Last Post 04/19/14, 03:50AM

The Business of Real Estate

Real Estate Technology and the Internet

Real Estate Technology, Social Media & Blogging

639 topics, 4885 posts — Last Post 04/18/14, 02:57PM

Business Basics

Goals, Business Plans & Entities

831 topics, 7562 posts — Last Post 04/18/14, 04:25PM

Real Estate Finance & Legal

Financial, Tax, and Legal

Tax, Legal Issues, Contracts, Self-Directed IRA

2785 topics, 20003 posts — Last Post 04/19/14, 03:34AM

Property Insurance

309 topics, 2045 posts — Last Post 04/17/14, 07:41PM

Personal Finance Discussion

328 topics, 2731 posts — Last Post 04/18/14, 04:33PM

Loans, Mortgages, Credit Lines

Private & Conventional Lending Discussion

2832 topics, 19695 posts — Last Post 04/19/14, 02:40AM

Creative Real Estate Financing

1209 topics, 8768 posts — Last Post 04/18/14, 08:34PM

Crowdfunding Real Estate

35 topics, 461 posts — Last Post 04/18/14, 05:17PM

Real Estate Professionals

Real Estate Professionals

Real Estate Agents

1209 topics, 7988 posts — Last Post 04/18/14, 11:30PM

Bankers, Lenders, and Mortgage Brokers

441 topics, 1922 posts — Last Post 04/18/14, 09:39AM


268 topics, 1678 posts — Last Post 04/19/14, 03:38AM

Local Real Estate

Local Real Estate

Local Real Estate Networking & Recommendations

1988 topics, 11603 posts — Last Post 04/18/14, 10:42PM

Americans & International Real Estate

161 topics, 566 posts — Last Post 04/14/14, 11:19AM

Foreigners Buying in the USA

62 topics, 409 posts — Last Post 04/10/14, 06:27AM

Canadian Real Estate

64 topics, 428 posts — Last Post 04/18/14, 04:22AM


Real Estate Marketplace

Real Estate Marketplace

15015 topics, 53950 posts — Last Post 04/18/14, 09:07PM

Real Estate Events and Happenings

164 topics, 2505 posts — Last Post 04/19/14, 12:04AM


Off Topic


2905 topics, 32408 posts — Last Post 04/18/14, 05:31PM

Housing News & Real Estate Market

914 topics, 8351 posts — Last Post 04/17/14, 08:41AM

BiggerPockets Real Estate Investing Summit

97 topics, 1751 posts — Last Post 04/10/14, 02:27PM

BiggerPockets Resources

Forums » Buying & Selling Real Estate » Neighboring Properties are going to be up for sale. What should I do?

Neighboring Properties are going to be up for sale. What should I do?

9 posts by 7 users


Real Estate Investor · Los Angeles, California

I received a phone call out of the blue yesterday from a commercial real estate agent for the two neighboring properties next to me. He was asking if I would be interested in selling my property along with the two others so that the three properties together would be more compelling to a developer. My neighborhood is zoned R3 (multifamily) but the three properties are single family homes.

My house is much (MUCH) nicer than the other two properties and even though my family and I are a little cramped where we live I had never thought of selling until I got the call from the realtor. He emailed me and told me that if the other two properties sold, that my property value would be "severely" reduced. While I don't believe it would be severely reduced, I'm sure the value would be affected.

I bought the house for $550k five years ago (I'm in L.A.) and upgraded a lot of things so I am pretty sure that it would comp out at around $475k in todays market.

I'm looking at stuff around the neighborhood and it seems that the supply is a little tight. I would love to move to a bigger place and with today's interest rates and prices, the mortgage would not cost much more than what I'm paying today.

Does anyone have any advise for me? I'm not in a hurry to sell and I have a little bit of equity in the house. But I would sure love for my daughters to have their own rooms and have more than one bathroom.

Real Estate Investor · New York

Make the move....
trust me when your daughters become teenagers they will need their own space. Esp when they have friends stay over.
I installed a 2nd bathroom in the older daughters (expanded) walk-in closet just to avoid the shared bathroom drama.

With today's mtg rates & the opportunity of packaging your home in the sale of the less appealing/adjoining properties I wouldn't think twice.

· Chicago, Illinois

What are they offering for the house? Where would you stay after you sold this house (assuming a quick close)? Are you prepared to rent for a short time? Are your financial ducks in a row so you can purchase another (obviously better) home? I'm assuming you already have the answers to all of these but they weren't in your post so I had to ask.

I agree with Pat, if you can come out of this clean then I would move. Kids grow up sooner than you think and if the place is already cramped....

SFR Investor · Annapolis, Maryland

Marvin, if it looks like you will shortly have lots of construction and multifamily homes right next door, when he says your value may be "severely reduced," he may be right. It's been my experience that most people looking to purchase single family homes do not want them located right next door to multifamily complexes. Even the single family homes I buy for investment property are nowhere near multifamily as I don't want the cheaper competition right next door, and people who will pay for single family rentals usually want the space and neighborhood, not have all the traffic, noise, etc., from multifamily. I would at least see what his price range is as I don't know commercial real estate, but maybe the lots together are worth much more than they are separately as single family homes. If you don't like the numbers, at least you'll then know it's not a viable option for you.

Developer · Orange County, California

@Marvin P. Tell him it depends on what the offer is! Though in reality there probably will never be a better time for you to sell, unless there houses on the other side of yours that you could be packaged together for a larger lot to sell down the road, and then the property owners would need to be agreeable and all of you work together to list them and sell as a package.

Otherwise, once the two lots are bought and start development, yours become a nonconforming lot, and being a single lot will have a more limited potential or appreciation in the future.

You need to understand that though you may love you house, the house has no value to a developer, and actually is a cost, as it has to be demolished and removed. The value is in the land, and it has to be within a reasonable range in order to make it worth it for the developer to buy and develop.

Also, if you are going to buy another place, you might consider doing a 1031 exchange.

You might consider putting a profile pic on BP, members like it when they can put a post with a face.

Karen Margrave, Parlay Investments, 1st American Construction
E-Mail: [email protected]
Telephone: 949-933-3955
PARLAY: definition: to increase or otherwise transform into something of much greater value

Real Estate Investor · Los Angeles, California

@Dyna J. No one is offering to purchase the land yet. It's just that the realtor is testing the waters in wanting to list all three together.

I'm not in love with the idea of renting especially since rents would be more expensive than my potential mortgage payments. Plus the thought of a much bigger house has me a excited (a little bit).

@Lynn M. That's exactly my thinking. I don't want to be the last man standing out here. The commercial realtor did say that he thinks that the value for all three properties would range from $1.5m to $1.8m. I don't know if those numbers make sense or not but if they're realistic, then I have minimized my loses. Thanks to a large down payment we made and the equity we have, we would have a healthy down payment.

@Karen Margrave: Yes. I know that even though this is my house and I like it, that I need to think about this as a business decision. Of course it greatly affects my family. But I am strongly leaning towards selling. I'll look for a decent picture of myself to throw on BP. :-)

Developer · Orange County, California

I looked that up for you on MLS and it appears that the highest and best use of the property is a condos. I just did a quick search for you, not actual comps, as I don't have enough info on your house and lot for that.

Personally I wouldn't want a house surrounded by 3 story buildings! If I get more info on your lot, I may be able to determine if it would support units on its own, or if it would need to be adjoined to others to make any development worthwhile.

I'll be waiting for your private message with email. As for pic... I know the feeling, I held out as long as I could, then finally snapped one with my phone!

Karen Margrave, Parlay Investments, 1st American Construction
E-Mail: [email protected]
Telephone: 949-933-3955
PARLAY: definition: to increase or otherwise transform into something of much greater value

Real Estate Investor · Audubon, Pennsylvania

Originally posted by @Karen Margrave:
Also, if you are going to buy another place, you might consider doing a 1031 exchange.

Karen Margrave - I don't see the sale of one's residence in this manner as qualifying for a 1031 exchange. But even if it did, it makes no sense to even look at a 1031, since the OP indicated that the house would not sell for more than the basis (what was originally paid plus improvements) - so there's no capital gain to try to defer. No need for ]section 121 exclusion either, due to likelihood of selling for less than basis.

Steve Babiak, Redeeming Properties, LLC
Telephone: 6109082183

· Phoenix, Arizona

I have a little trouble with the agent's hypothetical, and scare tactic, that your value would be severely reduced. I like your instinct to not "believe" his statement.

I'd seek the opinion of an independent commercial broker, and an independent residential broker, that don't have any potential vested interests in the game. I'd also phone the California Department of Real Estate to see if the agent's tactics fall within the real estate statutes and ethics of the profession.

My experience has been that larger tracts, obtained by "packaging," invariably have a "hold out" that thinks their tract is necessary for a developer to move forward. This can be true; but, I've seen the value both rise and diminish, depending on the scale of the proposed project.

If you decide to sell, keep in mind that the inquiring agent will undoubtedly expect you to pay the commissions, thus affecting your overall cash to find a larger abode.

As an added note: My daughters survived a small house; and, the wife and I are quite comfortable now and don't need to "downsize."

Sign up