Build on High-Density Multifamily Lot

7 Replies

HI All, I am thinking purchasing a property zoned high-density. 1 acre required minimum 8 units. this property is 0.76 acre and has a SFH ( built in 1900) on it. Initially I was thinking buy it and split the lot into 2 parcels, 0.5 and 0.26 acre, and sell the one with SFH on it, keep the vacant land. However because of the zoning ( RMF-24, minimum 8 units required on 1 acre lot) , my plan probably won't be acceptable by the city. Then I am thinking my options will be: 1) buy it,renovate the SFH, and sell it; 2) Demolish the SFH and build 6-8 units on it 3) split the lot to 0.5+0.26, build 4 units on 0.5 acre. I have the common problems others have, funding! mu fund is only enough to put down payment for purchasing the property as SFH. and I'll have very minimum money left to spend on construction, utilities, etc. I don't want to give up just like this, I am seeing the opportunity, however I need some help/ideas on making it happen. I appreciate all the response! thank you so much and have a wonderful day!


Updated 5 months ago

My number was off. RMF -24 should be 16 units minimum on 1 acre of lot.

@Ashley Zhang Hi Ashley, I guess it all depends on your experience too. I've never tried buying a high density zoned property, splitting it up, getting it zoned correctly and permitted. I imagine that has its challenges especially when things are moving slower in COVID world.

Then you also have to determine what to do about the SFH. What shape is that in? What do the profit numbers look like for renovating that? Would it be to flip that or buy and hold? Best of luck

Originally posted by @Justin Schreibeis :

@Ashley Zhang Hi Ashley, I guess it all depends on your experience too. I've never tried buying a high density zoned property, splitting it up, getting it zoned correctly and permitted. I imagine that has its challenges especially when things are moving slower in COVID world.

Then you also have to determine what to do about the SFH. What shape is that in? What do the profit numbers look like for renovating that? Would it be to flip that or buy and hold? Best of luck

Hi Justin, thank you for your quick response! It will be very challenging since city even mentioend i'll need to talk to them before any actions. The SFH is not the worst shape, but not good either, too outdated, such as windows are 100 years old. I actually is unwilling to do the reno at all. I was intend to sell it, my main goal is to keep the lot and build duplex initially. However with the high-density requirements, i cannot do it. I dont have any experience building multifamily. I just not sure if this is the right opportunity to start one. Thanks!

 



Originally posted by @Justin Schreibeis :

@Ashley Zhang also have you looked into a HELOC to get access to more money if you are planning to flip SFH? ( I did re-read your post and it looks the SFH reno will be to sell it)

I am very reluctant to do the reno since this house is 120 years old. 

 

If the land is worth more than the existing property and the seller is unaware, you may be able to flip it to a developer.  You will need enough experience though to be able to assess that feasibility and value (or have a commercial broker who does - and won't take it down themselves).

@Ashley Zhang Hi Ashely, I’ve recently been working on a similar project although I already have the land. High density is generally more like 18-24 units per acre. Have you checked out the zoning in your area? I decided to partner on this project to make it work for me. I’m putting up the land and my partner is putting up the money for construction. Triple check utility availability and proximity to the parcel. Good luck!