Building Right Now in North Myrtle Beach, SC?

Question

I have a plot of land willed to my sister and me in the North Myrtle Beach, SC area.  It is .17 acres and is appraised for $220,000.   It is in a great location and would rent well once something was built on it.   Building is around $250 a square foot in that area currently.  So after buying my sibling out for $110,000 it would take $500k to build a 2000 sq foot house there.  (Just an example).

I have multiple people interested in buying the property, but I'm wondering if I would be selling a potential real money maker by selling.  It would cost a lot up front to build and I'm not sure if it's worth the money at this time.  I could also buy out her half and sit on the property until construction prices fall, if that ever happens.

Any advice is greatly appreciated!

Myrtle Mike Thompson · Answer

As Alex just mentioned, the location of the lot is a big factor.  I just came across a recent sale of a 3 bed 2 bath home in North Myrtle Beach that went for $339/sqft.  Nothing super fancy or special, but it was east of 17 in a decent part of town.  Oh, and the house is almost 30 years old.  So if you can build a brand new one for $250-$275/sqft, you'll have some great options.  Short-term rent that sucker and if you're not seeing the returns you want then look to sell it for a profit.

Myrtle Mike Thompson · Answer

@Joshua Morton sounds like that might be the way to go.  You probably already have a local agent here, but if not I'd be happy to discuss and run some comps for you.  Best wishes with whatever you decide!

Laura Myers · Answer

I currently have a lot of land in Carolina Forest that doubled in value, so I can see your thought process. That being said, we decided to build since the value will only hold or increase. I interviewed builders and one was $160/sqft, so I feel like $250 is high? That particular builder also builds a lot of spec homes and that was his price out the door. The builder I chose was $125/sqft with obvious additions for this/that, but I liked his quality much better. Either way, NEW homes around us for half the size START at $350k with very builder-grade materials. We would never be able to afford our house in a gated community along the intracoastal waterway without already owning this lot. Builders will definitely want your property and that tells you it has value. (A builder wanted ours, too)

Good luck!

Alexander Knowles · Answer

Which part of NMB is it in? Assuming it is on the east side of 17?

Depending on your situation and what you're trying to gain out of it - try to hang onto it and build on it if you can stomach the guaranteed delays and extra expenses. If you have that opportunity to build something tailored to a short-term rental, you'd definitely do well once it is complete to either rent and manage yourself or even sell it to an STR investor. Would encourage you to invest in nicer finishings and workmanship as there are a lot of cheaply built/cheap flips homes popping up in that area commanding a big sales price.

Joshua Morton · Answer

If I bought my sister out it would be with the intention of building and renting the property.  That area makes alot of money in the summer time from vacationers.

Greg R. · Answer

There are several possibilities that I see.

1) You both sell and walk with +/- 100k after closing costs, taxes, etc. Take that money and invest it into whatever you want.

2) Buy her out, which will require 110k cash, then you'll need a construction loan (or more cash) to build a house.

3) Buy her out and sit on the land.

4) Offer for her to buy you out and move on to whatever venture that suites you.

The question you need to ask yourself is, what's your appetite for dumping money into this? Do you have 200k+ to put into this project? Are you an experienced investor who has a good strategy for this land if you bought your sister out?

If you did build a house on the land, would you be intending to cash flow, or to sell for a profit? Have you done rental analysis for the area? STR, LTR?

There are so many questions that need to be answered in this scenario.

Building Right Now in North Myrtle Beach, SC?

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