Split off side lot, sell or build

[Tyler Goodwin]

We completed a subdivision of our property, after receiving a variance to create a second lot with 95 feet of road frontage rather than 100 feet. In addition to being skinny, the lot contains a fair slope in some sections, including close to the road, so the final build approval will likely include a conditional use permit.

if selling, I am unfamiliar if the builder/buyer would do all approval requests or if we would potentially be involved in confirming the suitability of different build options. The lot is approved for a duplex or SFH in a very desirable location.

Very limited comps as this is basically the last lot in an old neighborhood and most areas nearby downtown have been built out for decades. 

The new lot forms an L around the parent property with .6 acres remaining and 1.6 in the new lot, but the back 3/4 acre is wetlands. Since we own the parent property at 3% interest we intend to hold onto it, and we like the idea of owning the neigboring lot,

espeicially because our lot backs up to the L shape of the new lot, but wehave struggled to come up with a way to get even break even cash flow. It's notably cheaper to rent than buy at this time in our market. 

How might we rethink this and what build to rent option is most feasible. I'm not totally opposed to gambling on appreciation but I'm struggling with the idea of negative cash flow even with bringing 200K+ land equity to the deal. I'd imagine if I added in principal pay down and some tax stuff I might be able to come up with something that breaks even but I really struggle to consider a build option that doesn't require cash out of pocket for the first handful of years.

Ultimately, im looking for perspective on what we might consider here. I've listed a few ideas but im not sure all the angles to consider and/or what is truly feasible. 

-partnering somehow on a condo build and retaining ownership of one.

-somehow listing the lot with a builder tie in as a means to help navigate the conditional use permitting or as a means to potentially help control what might be built next door.

 Our city has a program where people can buy credits toward increased density and an investor may be interested in a special project. This could be noteworthy in that it might give the lot additional value, but it also could create increased density next door in a way that is undesirable to us as the neighboring property. 

Again, it seems that selling may be the cleanest option for us, but appreciate any advice or insight to consider.