VACANT LOT with WETLANDS

[Jennifer Lee]

HI BP

It's been a long time since I have posted.  I have a NEW CONSTRUCTION, VACANT LOT buying question:

My experience in Real Estate since I found BP has exponentially grown.  And now I am charting in uncharted territories (at least for me).

I found a vacant lot, in a good SU-1 Zone (Special Use) in a commercial center of a growing town.

The lot, caught my attention, because it was listed at a fraction of the price of "regular" lot.

So immediately, I thought SOMETHING MUST BE WRONG with it.  All the lots surrounding it has been developed (USPS, big box stores, Hotels etc)

We did a driveby.  The lot is relatively flat and it slopes to the back.  We found that there is a CREEK that runs by the back of  property.  I have access to RENDERINGS that the seller provided, approx. 2/3 of the 2.5 acres is designated WETLANDS.  The renderings also provided possible uses; medical, office, retail and restaurant positioning 

I was looking for something "small", the proposed usages are:

 * 6500 sqft medical/retail office with 40- parking was what I am looking to do.  

* 13,000 sqft 2 stories (10 unit apt or 8 unit office ). 40+/- parking ( I already own 2 of these types) or 

*  3500 sqft restaurant with more parking (I already have a restaurant unit, so don't want to go there)

I looked at the pricing, the lot is 1/3 of market price, I assume b.c 1/3 is buildable 

1. HOW DO I DO DUE DILIGENCE?

- I looked up all the zoning and futuring planning plots and map, my goal is inline with what the county wants. I haven't talked to the county yet, didn't want to rock the boat til I am sure.

-I have researched new construction: $70-150/sqft depending if it's medical or office

-Rental in area is $15-25/SFT,  avg is $18/SFT

-I talked to my finance guy, and if my husband was to use the medical office, financing would be in a better position (this is unknown right now, we toyed with idea)

2. WETLAND: This is what scares me as a "newbie", should I move on?  

-my experience with commercial is I have bought several existing building and have dealt with bits and pieces of commercial real estate. Dealing with county to do improvements, leasing business use issues. and landlording/maintenance.  I have my vendors and players in place.

-NEW construction experience: building our live in flip with builder, and helping client with new construction buy side...that I think doesn't really count though.

3. WHAT ARE THE COST ASSOCIATED in BUILDING A 10 UNIT APARTMENT FROM SCRATCH?

- I have done enough rehab and worked with my GC long enough to know what an a la carte cost of bathroom, kitchen, roof etc are.  I was surprised my number was off by 50% (hahahaha)

- I know there has to be some pre construction cost, architect, engineering etc...

These are my major questions right now.  I have more, but if I can't get over this hump, I might pass. 

EXIT PLAN:

1. BUY/HOLD: Land lease, or build to suit when tenant comes along

2. BUILD MEDICAL/APT BUILDING and RENT