To build or not to build
Hi there, fellow investors, I need to pick your brain on a decision I need to make. This is a follow-up question to one I asked a few weeks ago in this same forum.
I own a piece of land in GA that I bought a few years during a wholesale event for wich I am paying over 1K yearly for property taxes and HOA. Unfortunatelly this land has not appreciated since, on the contraty, when I spoke with a local realtor she said that getting what I paid for it, was propably a bit of a stretch.
Looking for alternatives I contacted what seems to be a reputable fix-cost builder in the area that has a partnership with a lender and offers a "no-payment" construction loan. Basically the lender pulls the loan and charges me 3% of the construction cost until delivery, CC included.
To make is less tedious I'll list the facts I have now, that I am weighting to help me decide what to do.
Options I am weigthing:
- Sell land at a possible loss
- Keep paying yearly for it and potentialy get into a deeper hole
- Build it to sell with some risks.
Facts:
- I've been paying over 1K/Yr to keep
- No comparable sales at all. New house may appraise well(I have not ordered the appraisal yet but other new constructions from these company show me that it may) for a healthy margin but...I am concerned that I will get stock with it or have to discount it deeply for a quick sale. I am thiking that given the margin, if I need to sell at a loss, it may be lesser than selling the lot now.
- This company has completed about 8 or 9 new costructions in the same community, just that owners seem to stay, not sale. (Data provided by the construction company but I confirmed it with the property apraisal website)
- Not a very strong STR area, so not a great plan B
What can you say about my options here and if there is any other I ma not seeing please share.
Thank you!