I am very new to real estate and recently purchased a 1950 home on 3/4 acre lot with the intention of remodeling. This property is located at Novi, Michigan on the side entrance (corner) of a very good sub-division. I contacted few of the builders for remodeling, most of them suggested to tear and construct a new home. Couple of them suggested to apply for rezoning since the sub-division condo's are located on the right side and as on the back of the lot.
Could you please help me understand the process and how complicated to make it happen.
@Nathan Kalai I think the first thing you need to figure out what is the "highest and best use of the property?" Do a cost/benefit analysis of the 3 courses of action you mentioned. What will it cost to rehab/flip or hold? What will it cost to tear down and rebuild? What will it cost to rezone and convert to multifamily? And what will the after repair/upgrade value be of the property for each option?
Then, which one can you finance? Which one do you have the team in place to be able to accomplish? Could you make a respectable return to wholesale this to another investor who is looking for just this type of deal?
Trying to learn a new process while being the owner/investor is a very disadvantaged position to be in. I would discourage you attempting any option besides hiring a contractor to rehab like your original plan. The other options are complicated and not the type of deal to learn as you go.
If nearly all the contractors say to tear down and rebuild, it may be a statement about the condition of the property. I would seek the opinions of some other local investors about what they would do? Maybe partner with one of them or wholesale it to them and ask to shadow them through the rehab process to learn how it's done?
A re-zone request is a formal procedure whereby a developer asks a local governing body the change a property's designed use to a new type of use. Usually simple but can get tricky depending on local politics and conditions. Talk to local zoning board first as you may not be allowed to do what you want to. Robert nailed it. Find out your best play before you go further.
i'd be very concerned if you are this new and are attempting to tear down and rebuild a multi. it's a fantastic idea/opportunity and novi is a great area. but your challenge is your inexperience.
Thanks very much Rob, Clint, George for all your valuable advise and guidance.
Rezone to built condo would be the most valuable options because the nearby condo's , which is almost 10 years old is priced between 225k - 250k for 1500sq feet.
Today , I checked with city of Novi for rezoning to built condo's. As per city's master plan it's NOT zoned for multi-family home. It looks like the builder went to court to get the Judge's consent to built the condo's.
Any idea how much would it cost to get the Judge's consent and the process involved.
As Rob pointed out , I will also look for local investor to partner up on this venture.
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