Buying lots in older existing neighborhoods

5 Replies

I'd like to know what the BP community thinks of buying older lots in existing communities to build homes for sale. I've noticed some builders will discount their remaining lots in there developments. I want to start building homes the trend here is "tear down rebuild" and it's expensive, although the profits are insane I want to start out small...... Let me know what you think or your experiences.

@Adrian Becoat

Here in the western chicago suburbs (downers grove, hinsdale, naperville etc), there are a lot of demand to find empty lots (downtown areas) and builders are especially looking for tear downs to build new. The comps support that. 

As long as you have a team in place and you have experience building, you should be OK with the numbers supporting new build. 

HOWEVER, you mentioned other builders are discounting their remaining lots in their development. Which makes me think there might not be as much demand in your area. So double and triple check everything, as it would be tough to compete with a builder in terms of costs and experience. 

In addition to the demand consideration @Chris T.  calls out, you also want to make sure the Covenants, Conditions & Restrictions (CC&Rs) in the HOAs don't force you to build the house in a style that will throw off your numbers. For instance, the exterior may have to match the other homes in the community. You'll then need to have your architect accommodate those requirements. This isn't a guaranteed issue, but something you want to double check before acquiring the parcels.

@Adrian Becoat

There are definitely perks to starting with an empty lot and and a blank slate. @LaSean Smith is also correct. Make sure you know what restrictions are on a site from the city zoning, CC&R's and HOA standpoint. They are not too hard to manage but your design would need to take them into account. Make sure you have a good team and you shouldn't have any problems.

Good Luck

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