Developing Land For Duplex and Four Plex

[Baron Hicklin]

HI all,

I am not sure if I am posting in the correct area, and if not please let me know. I am interested in doing research on developing land to put a number of duplexes and fourplexes on it. But I don't know where to start my research. I know I need to know about the characteristics of the land, water, septic tank, zoning, and a bunch of other things. If someone can please suggest, books I can read, places to research for information of things I need to know, I would be very grateful. This right now is only an idea, but who knows what it could lead too. Thank you much!

[Mike Wood]

@Baron Hicklin  I would first research with the local city/county to determine where the land is zoned for 2-4 units homes.  Every piece of property has a specific zoning assigned to it, and that dictates what is allowed to be built.  While it is possible to get zoning changed, its alot of work and not something to assume is easy.

Next would be to find target areas that appear to be properly zoned and look at house prices (comps) and rent ranges.  This will allow you to determine if new construction is feasible and if the rents will support the costs.  2-4 unit houses are valued based on sales comps, so it is important to understand what house prices are in the area.  Rent ranges is important, as it would not make much sense to build a new duplex for $400k, only to rent each side for only $500/month if thats all the area would support.

Lastly would be construction costs. These could be ball parked in the initial review to see if its feasible.  If 2-4 unit homes are selling for $50/ft2, its likely not possible to support new construction (which can run $90-150/ft2 total costs).

If you get past those items, I would suggest finding a good local bank to discuss construction financing and a good general contractor to work with the building costs.  

There is so many variables with new construction development, its hard to answer your question.