How to Determine This ARV?

Question

There is a property that has water, power and sewer hook up. The house is all but demolished. I want to remove whats left and put 2 Double-wides in its place. I was just curious how i would be able to get a mortgage on the property to pay off the private lender and how i would determine the ARV. If anyone has done something like this, please let me know of the steps needed? The land is cheap and i was going to put brand new Double-wides there. I had figured the entire cost to be around 100k.

Joshua Dockery · Answer

Like @Heath Ryans stated you will have to ensure that the zoning allows doublewides. You will also have to have separate utilities set up like sewer/septic, water, and power. You will probably have to get a survey done to parcel out one piece of land for the demolished home and another for the new one. Then most likely have to meet set back requirements like 8 to 12 feet off each end and 30 feet off front and back of the homes. You will most likely have to pay for another sewer/water tap but may be able to branch off it. That depends on your water/sewer utilities company. I work for a local home center in the Tri-Cities TN area and we deal issues like this alot.

You can save money if you demo what's there yourself and do anything else you can, but if you contract everything out you will be more than the 100k especially with having to invest in all new utilities for one of the doublewides.

ARV would have to include the value of the improved land. My experience is that for doublewides with land have an ARV of 100'000 to $125'000 based on home and land. That's based on the appraisals we get. I would also invest in a permanent foundation because any local lender will require it if you want to sell down the road.

Heath Ryans · Answer

@John Gillum before you do all that, have you made sure that you can legally put a double wide there?

Gloria Sheridan · Answer

I like that you are being creative...but @Heath Ryans makes a crucial point. Find out what the zoning is for this property and how hard it is to get exceptions. In my area, I bought a grandfathered property (3 small houses nestled close together) that would never be allowed to be built today because of the zoning. (E.g. minimum lot sizes, individual septic required for each house). As long as I don't try to re-draw the property lines, I'm ok to continue as-is. Think twice about totally tearing down whatever house remains there; by leaving a sufficient portion of it intact, you might be able to keep your grandfathered status, which may be in some ways beneficial to you. Worth researching. Also, be sure to think about your exit strategy: In the future do you see yourself selling these as individual homes, or will the land always stay as essentially a multi-family property? Good luck!

John Gillum · Answer

Man that is excellent. Thank you, i have a lot to consider now. I spoke with the zoning office for this county and i don't think there will be an issue as far as the doublewides. I do feel a bit overwhelmed now though. I will have to do much more research on this project.

Either way, Thank you.

John Gillum · Answer

No I haven't, and I am in no way ready to move forward with this deal. I'm trying to make sure I ask every question I can think of. Thank you and I will check and be sure it is allowed.

How to Determine This ARV?

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