First-time buyer here so I am very green to investing in real-estate. Would love to pick everyone's brain if I am making a sound investment. I saw a 4 acre lot in Topanga canyon for around $400K. Ideal situation is to build a pre-fab home if permits allow for it (not sure if it even has a permit yet, waiting on realtors) Curious to know is it worth investing up in the canyons? What are the things I need to consider for building a home but also its resell value given all the fires that have been happening there?
1. Know the permit fees they can be astronomical and kill a deal, if you don't know approximate cost all the way through the process you should find out or you are really rolling the dice. Also most of those fees aren't financeable unless you have some sort of construction loan.
2. Look into fire insurance rates in the area, a lot of insurance carriers pulled out of a lot of areas of CA for fire risk and a lot that are left can charge high prices.
1. How close are the utilities? Bringing electrical, water and so on will become expensive.
2. Is there a road? If not you may have to pave it if it is only dirt now.
3. fire insurance is expensive if you can get it. Some home insurance companies won’t cover you if you can’t get fire insurance.
4. Prefab construction may not work because the big trucks can’t get up there. My first question to any prefab company is to ask them if they can make it to your site.
5. The house will need a fire sprinkler system and defensible landscaping around the house.
It can be done but there are lots of items that will drive up costs. It depends what homes sell for in the area. Is this also a spec house that you will sell or for yourself? Can you subdivide the 4 acres and get more homes on there?