Rental Property Investor · Saint Paul, MN · Member since 2017 · 6 posts · 1 vote
Hello BP community,
I live is St. Paul Minnesota, near the University of St. Thomas, which is a great student rental market. Recently, my real estate agent let me know about a development opportunity. She believes there is a chance to buy 3 congruent lots in a T-1 zone, allowing the property owner to build up to 55 ft of multi familty housing. The 3 lots currently have homes existing seperately on each one. She let me know that if I could make something happen, I could get a piece of the pie, but I don't even know where to begin, and neither does she.
Does anyone have any advice to share? How might I find a seasoned investor who specializes in these types of transactions and developments?
@Joshua Kerner this is not an easy project to complete. You would have to figure out financing with a construction loan, confirming with the planning commission that they would approve of your project, and go through the design phase before talking to the planning commission.... Plus - that is not a cheap area to but purchasing houses at market value for demo....
I don't know your experience level but if you want a piece of the pie you will have to find a partner who can do this deal for you from start to finish... That may be tough.
First, this is not legal advice. @John Woodrich is correct on the complexity. It sounds like you have an opportunity to offer a developer site control of an opportunity--that essentially is the pitch to a developer. You are looking for an active participant as it sounds as if you are not the developer. Typically, property value add of site control comes AFTER the site is fully entitled for the new development and someone has to funds soft costs--preliminary design architecture fees, design fees, legal fees, potential contractor consultation (to get #s). This is an entrepreneur's game of cart before the horse and horse before the cart at once--place property under contract not knowing if the deal will happen and spending at-risk soft cost dollars. The more a developer has done a specific property size in a city, the more confident and less risk. If the property is not under contract, you have little to offer at this time. Once it is, you have a PA that you might be able to assign to a developer--but would need all the standard pre-development/entitlement terms, or a really long contingency with little earnest risk. Your best bet today may be to visit the City of St. Paul and consult with zoning to get an immediate read on what you will need given the zoning, parcel size, etc.