A collection of properties has popped up for sale that includes 5 of 10 total parcels on a single street. The street is entirely multi-family, duplex to triplex properties.
The 5 parcels include two side-by-side oversized parcels that can each be split in half to create a new "normal" parcel for a net 11 parcels on the street.
This new parcel has enough space to construct a new duplex with parking/back yard/etc.
With the sale of the original 5 of 10 parcels plus the creation of the 11th, if purchased this would give me control of 6/11 parcels on this street. Enough for a majority.
My question is if control of a street is worth anything and would you pay extra for either control of said street or how much would you value vacant land ready for construction in considering how much to pay for a portfolio of property.
The numbers are OK without the 11th parcel but not spectacular. It could generate $100/door at list price but I am unclear on how to evaluate future potential on undeveloped land and if there are benefits to controlling an entire street via owning the majority of land.
Thoughts most appreciated!
My experience is that raw land is, or can be, difficult to deal with. In Pennsylvania, there are sewer/water tapping fees, which can be expensive. Many of the local banks require significant money down if/when someone wants to purchase raw land, 65-70% if there are no plans to immediately build a house. Lastly, if you do decide to build, right now it's generally cheaper to buy used than build new. Locally, our Habitat for Humanity builds for about $80/sf using donated materials and time. That cost excludes the cost of the land.
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing