Sub-Dividing Lot & Adjacent New Construction

2 Replies


This is my first post on BiggerPockets. I have heard great things about this site and I'm excited to get more involved. I am looking for my first deal and had an idea that I wanted to get some advice on. I'm looking for my first house (I currently rent) and want to make the most of it. I thought of a strategy to buy a house in the city I live in, specifically on a double lot. These lots come up every once and a while and I'm currently looking at one I'm very interested in. While I live in the main house and fix it up, I also want to build a house on the adjoining lot and sell it immediately after it is complete. Then I would rent the original house out while I moved on and repeated the process. I have identified a few neighborhoods in Pittsburgh, PA where a new build near the city could go for over $500k or more easily, while the average construction cost is around $300k for a row house.

Since I am a beginner, I wanted to see if anyone has tried this strategy out before and if they had any advice or suggestions of situations to look out for. I'm not really sure how to finance it either. I can buy the main house myself, but wasn't sure how to finance the new construction, or if starting an LLC would be beneficial. Any thoughts would be helpful.

Thanks in advance.


@Rick Miller welcome to bigger pockets!  You can do most of what you described above and the best party to speak to is a builder.  They will know all the rules and permits and etc. etc. etc.  to follow when building a home.  But essentially, you would buy the home with the double lot, then survey off the other lot, then build a home upon that lot.  We aren't putting 2 homes on the same lot because financing will be harder to receive.  Even if you have all cash to do this we still want to split the lots in case you ever need a loan or when you might sell the home (even if it's 20 years from now).  So if someone else were to buy, it needs to be as simple as possible for them to buy too.  Hope this helps!

Thank you for the quick response Andrew!  Any tips on financing a transaction like this, or a recommendation for a book on this subject?

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