I recently came across a 4bd/3ba that is next door to a Church(Church looks like it was converted from a house). The properties are being sold as one. The Church sits on 2 lots. The 4/3 could use a rehab but it's a solid home. They're being sold at market value so obviously the price will have to drop. I'm thinking of just doing a demo on the Church and building 2 new homes (I know it sounds horrible but it really doesn't look like a regular Church) I would rehab and cash flow on the 4/3. Is building new homes completely out of the question considering I won't be able to get the land for fairly cheap? Is there a general rule of thumb on land price/percentage for constructing new homes? They're asking $550,000 for the 2 properties on 3 lots. It sounds like they're willing to negotiate, I'm just waiting on the comps from a realtor buddy of mine.
Some say 20%, or at least that's what I heard from the forums. Don't demo the church, leave 2-3 walls so it will still be classified as a "renovation" and not new construction, cuts your time around 6-8 months. If you can do 3 houses, rehab 4/3 then cash flow, rehab church to 4/3 then cash flow, new construction 3rd house cash flow. If you could do selective demo on the church, leave exterior walls as an option (if it were previously a house), it would make more sense, try to salvage the roof system also.
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