Hi BP community,
My mom recently inherited about 12 acres of pasture on the corner of Dixieland and New Hope in Rogers, AR. It's adjacent to a police station, near shopping, and near the high school. After lots of reading & listening on BP, it occurred to me that it might make sense to build some apartments there. Alternatively, maybe a single-family neighborhood would make sense. Then again, I'm open to AAA (storage units, gas station, etc.) as well. If I pool capital with some other family members, I think we would have some options, and since we own the land, that seems like a huge start. I am looking for cash flow and a buy-and-hold strategy, and my mom just wants to do something useful with her property. I should probably mention that I don't know much about the zoning situation. Currently the property is zoned agricultural, and I heard the population density zoning in that area is somewhat low.
I need some help narrowing my focus. I have about $250K available to invest aside from other family members. Up to this point, I have been scouring the MLS for SFH deals, and I have been thinking about pulling the trigger on a direct mail campaign in my own area of Cabot, AR. However, it seems more efficient to buy one big multi-fam instead of hunting down a bunch of SF deals. From what I have learned, you can fit about 33 to 36 units on one acre. There's no way we have enough capital to fund anything close to 12 acres x 33 units at $1.25 sqft (+/-$39M). Furthermore, it sounds like walkability is a big deal in NWA right now, and while the property is in close proximity to several good things, it's not walkable like downtown Bentonville.
Please help me with my strategy. I need cash flow as part of my buy-and-hold goal. Is it feasible to develop one acre at a time, slowly adding apartment buildings in row-like fashion? There was a guest on the podcast who did that, but I believe there is planning that has to occur in terms of irrigation, pavement, etc. Maybe there's something creative that hasn't come to mind yet, like a farm. As I mentioned in the beginning, I'm open to developing the land into a SFH neighborhood. Maybe I should make the neighbors mad and build a mobile home park, haha! At least the cops would be close!
Thanks for your help,
@Jordan P Applegate I would start with determining the zoning and/or talking with the city planning first to see what you can/can’t do with it as-is and they could help with suggestions on what they think you could get approved for.
Also consider getting it rezoned to a highest and best use and the land is worth more whether you develop yourself or sell it.
Familiar with the area, moving to Rogers currently. They aren’t going to approve a mobile home park so I wouldn’t worry about that.
And I’d also talk to a commercial broker to give you an idea of current worth, and/or ideas like parceling off the corner potentially. Can’t say I’d recommend storage as there are three new developing within 3 miles from there right now.
The key is to determine the highest and best use and absorption rates. Once you determine that you can definitely phase the development to match demand.
@Greg Dickerson . Can you elaborate more on what you mean with absorption rate?