New Investor Would Like Some Advise
Hi I we are in the process of completely renovating a 850 sq ft house in Grays Ferry which is starting to become the next hot neighborhood in Philly. We have owned the house outright. Initially got a loan for $25k as a start but we are going to need more obviously. Probably another $30k. We are planning to rent this property at around $1200 / month which seems to be the market rate currently.
We also own outright an empty lot about a block away. We have been offered high 30’s low 40’s. I would love to develop this empty lot like other people are doing in the area and I’ve gotten some rough quotes of $125 - $200 / sq ft to build a house from the ground up $125 being builder grade and $200 being high end . So we are looking at between $115k - $180k to build a house on the lot.
We don’t have the funds to build on the lot. Taxes on the lot of minimal so I don’t mind sitting on it but since it’s an empty lot prices won’t go up not even close to if there was a house on the lot. Maybe we could get $50k down the road a little bit I doubt not much more.
If you were in our situation would you sell the lot and use the funds to fully pay the the renovation for the house and rent it out with no mortgage @ $1200 / month? Or what are ways that I can find the funds to develop the empty lot?
Thanks!