Hello BP Friends,
Two years ago we bought a 1908 house on 1.1 acres of land. Historically it was divided into 10 lots. Due to the fact that there was no sewer, it was not buildable. Half a year later, sewer was put into the street, in front of 5 lots. At this moment, the entire property is divided into three tax parcels.
We are located in a hot market area and would like to use the opportunity to make the most of our property.
What would be a good strategy to go with? We may consider partnering with someone.
Property address: 35530 52nd Ave S. Auburn WA 98001
Thank you for your input.
Before you do anything.. go sit down with a local land planner engineer and have them tell you what you really have.
Also go to the county planning and see if your shadow plat can be reverted to legal buildable lots.
in Portland this is quite common its called a lot confirmation.
A little history on the West coast.
Our cities basically expanded from San Francisco back in the 1800's and the same engineering firms that platted SF in the middle 1800s also did Portland and many other cities.. so they did this with 25/100 lots on a grid pattern.. its those 25 X 100 lots that are under your plats and sometimes 50x100 unless someone did a reversion to acreage or combined them legally many times they are still legal lots.
and or like Portalnd they have all sorts of funky ways you can resplit them easily.
for instance I have one right now were I had one home it was a tear down tore it down. it had 4 25x 100s but because the house straddled the middle two they would only allow 3 lots.
well I confirmed 3 lots then did lot line adjustments so I got 1 skinny 28 and 2 36's the 36s I sold for 50k premium over the 28s and a 50 foot with two 25s would not have netted me as much either .
and to be frank.. City of Portland is pretty tough to deal with but I had a nice lady and planning who spent the time to go through all the different options.. but you do have to know enough to quiz them on the options .. they won't do your thinking for you.
Also sit down with a CPA before you do this. From what you said, it sounds like you will be dividing the land and selling multiple lots. This can trigger a tax situation where you will be considered a "dealer"... which has poor tax treatments (even may have to pay social security taxes).
There are ways around this to minimize the tax impact, but you have to be proactive.
If you lived in the home, if you plan on developing the properties before you sell, plus a few other questions will determine this best choice tax wise (and determine if you qualify as a dealer). Be sure to run it by a CPA who specializes in real estate first!
Best of luck as you decide how to capitalize on the opportunity!
@Alan Rohrer I usually start with check with your CPA so you don't end up like me a dealer !!
good advice. and especially since he will probably have a 500k tax exemption on personal resi.
but he may be looking to just sell off some lots.. but yes your absolutely correct..
1. figure out what you got
2. talk it thorugh with your tax advisor.
@Jay Hinrichs gives good advice on this. I was hit up with a somewhat similar situation just a few days ago. I am now trying to iron out the details. One of my investing agents sent me over a possible development deal in Salem that has a few lodges already built, on a large plot of land, and cable of building 29 additional units. A Development packet was already filed. However, we need an experienced developer, local land planner engineer, the land would need to be prept, plated, lots of research into marketing, financing, design, what is the best use of the property (commercial, single family, multi family, etc) what is the average age of renters in the community, what is the expected growth rate of renters to owners. Etc and etc. Lots of time and energy besides just saying @leonid
@Leonid Stakhov that you have land that needs to be developed.
Consider bringing in a vale add syndicator to do this initial research work so you have a better idea of what the market is, what the best use of the land is, etc. then you have a proposal you can pitch to investors and developers. Best of luck.
If you can build on them you should partner up with a builder and develop them! You’ll make a lot more than you would just selling them. I’m not in your market but can help you pull together a rough idea of what the numbers would look like if you want.
- I've identified two development properties (in Bend, OR), both have SFR on multiple acres, within city limits. One has gone through some land use/zoning changes. I'd like to list them for sale or work with a Builder that I have begun a relationship with to Broker a deal on my own. Any recommendations for folks who could use a tax map and draft a few options for subdividing to the greatest extent possible? I'd like to be able to reference # of SFR tax lots are possible with roads and infrastructure?
Hello everyone, I appreciate your responses and apologize for not responding in a timely manner. I’ve paid a visit to the county planning office and found out that they aren’t much help. At this moment, I see that the best option is to go with construction. I may not end up with 10 lots since my current house is sitting on 2 lots and have other buildings on property. So the next step is to go with surveying the land; correct me if I may be mistaken. I have experience in construction but not in development and would consider to syndicate with someone who has more knowledge and experience with this.
Originally posted by @Roberto Gutierrez :
I’m not in your market but can help you pull together a rough idea of what the numbers would look like if you want.
Yeah that would be great if you can help with this.
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