Investor · Austin, TX · Member since 2015 · 29 posts · 2 votes
I have recently acquired 3 neighboring lots in a highly desirable area of Austin Texas. Total these lots equal roughly 1.2 Acres and can be subdivided into 6 lots, of which each can have 2 units (House and ADU or Duplex). Under current zoning I am able to build 12 total units on this property. Austin is currently in the process of overhauling their building Code (CodeNext) and under the current proposal I would be able to build 3 units per lot. I have listed below what I believe my options are and I am interested to hear what people familiar with building in Austin think the best way forward is and why.
Option 1: Move Forward with re-subdivision and build 12 units
Option 2: Combine lots and Attempt rezoning to build Apartment Complex, Condos etc.
Option 3: Wait to see what shakes out with CodeNext to see if I can build 18 units
Developer · Garland, TX · Member since 2008 · 8k+ posts · 4k+ votes
8y
I hit post too early, on my mobile.
Do you have a civil engineer lined up? That would probably be your number one resource for options number one and number two.
I don’t think I would wait for Cude Next. Maybe choose one of the other options, and Code Next could change your direction, but it is still vaporware this point.
I am working on option two on a property on the east side right now. I bought the property in November 2013, and it took 2 1/2 years to get zoning changed. Then it took another year and a half to get the building permits, which I just got this week. So far, it looks like the numbers support waiting that long, but that’s largely because the market has continued to move up through the holding period.
Developer · Garland, TX · Member since 2008 · 8k+ posts · 4k+ votes
8y
Ryan, you seem to have a pretty good handle on your options, and I would say all of them could be viable.
The easiest option is #4, just sell as is. Would that give you acceptable profit?
Next, option two, could get you near double one option one would yield. Expect it to take at least a year, and maybe $50K-$100K. Worth it in my opinion.
Developer · Garland, TX · Member since 2008 · 8k+ posts · 4k+ votes
8y
I hit post too early, on my mobile.
Do you have a civil engineer lined up? That would probably be your number one resource for options number one and number two.
I don’t think I would wait for Cude Next. Maybe choose one of the other options, and Code Next could change your direction, but it is still vaporware this point.
I am working on option two on a property on the east side right now. I bought the property in November 2013, and it took 2 1/2 years to get zoning changed. Then it took another year and a half to get the building permits, which I just got this week. So far, it looks like the numbers support waiting that long, but that’s largely because the market has continued to move up through the holding period.
Investor · Austin, TX · Member since 2015 · 29 posts · 2 votes
8y
Thanks Jon,
I agree option 4 is by far the easiest, and while it would be an acceptable profit I am just unsure how often I will come across a deal like this.
As far as option 2 goes I should say that I am located in a Neighborhood Planning Area and was told that this area specifically may give me some trouble with a zoning change. The $50-100k and an extra years holding costs would be more than palatable if it would guarantee me the change, but as I understand it that's certainly not the case here. Do you happen to have any experience with this area?
Developer · Garland, TX · Member since 2008 · 8k+ posts · 4k+ votes
8y
I am also working on option number one on a 1 acre lot on the east side. We are dividing it into 4 lots, to build 8 homes. I expect to get the lots finalized within a few months, get the building permits by the end of this year, and building in 2019. The numbers look really good on this deal. Also, the process is moving along faster than similar deals I have done recently. I have divided single lots into two lots a few times.
So with the very little I know about your deal, I would be biased to pursue your first option since that’s the one that has been mosr successful for me so far.