I'm looking to start building single family homes in the Dallas area. My strategy is simple find a builder, find a lot or tear down, finance the deal at the lowest cost possible and split the profit with the builder.
I want to build property at the lowest price-point while creating the most value to the customer therefore allowing for the largest pool of buyers so it is sold quickly.
What I'm finding is 3 bedroom 2/2.5 bath 2000-2500 sqft seems to be a nice point to aim for however I want to start looking at lots and start pricing everything out. Depending on the area something could sell for $250-$500k and up..
How can I determine the lot size I need to look for?
Also I've been looking for lots mainly on the MLS. I've done a lot of reading on BP and from what I've read finding lots on the MLS is like once they hit the MLS they are already overpriced so I believe the real money to be made is in the negotiation or finding other areas besides MLS to get good deals on lots?
Someone once told me the money that is made in real estate is all done once you buy or build the property not when you sell it.
I'm trying to make the best decisions here to start if someone has any advice I'm all ears.
In our market (I'll assume Dallas is similar) lot coverage % is going to determine the size of lot required for the home you would like to build. For example, most of the projects we do are at 40%, so if you calculate the sf of the new building it cannot be more than 40% than the sf of the lot. Keep in mind this is everything under roof, not just livable, so you must include garage, carports, patios, eaves, etc. On an abnormal lot size you may run into some other issues with setbacks, but lot coverage would be the best place to start.
@Chris C. Joe Boston at Dallas REIG is doing this exact method of investing for his members, you should attend their meet up.
You can use LoopNet, (app or website) to find BROKERS, you can use it to find property as well, but you're just going to be seeing MLS listings. But there is no shortage of brokers, Call 'em up, if you can get a hold of them, ask them questions, pick their brain. See if they know of anything off-market or have heard of any lots or properties that you can get for a discounted price compared to "post-MLS list price"
A man once told me "Closed hand never gets fed"