City Block Full of Lots, Near Seattle - $83,000 Full Price

[Chris Newman]

"The riches are in the niches." - Old REI aphorism.

If you're into (or would like to learn-by-doing) bulk-wholesale-to-single-retail land flipping, forced value appreciation and "Strategic Seller Financing," for significant secure ROI's through putting some cash to work, this is right up your alley.

It's not necessary to be physically present in the Pacific NW to work this deal, although active local investors are certainly welcome. All transactions will be handled through Chicago Title escrow, within an established LLC (which I own) that technically owns this land. I purchased it in 2010 partly in anticipation of some major local land use changes, which have finally happened, or are about to.

For Sale: Three-only subdivided full city blocks each containing 11 individual lots, within a planned commercial development that’s ready to launch. The individual lot status has been verified with the local planning dept. and there is no further subdivision necessary to break up these blocks into single lots: You just sell them off like any other real estate.

This is not useless junk land out in the middle of nowhere. It’s located in fast-growing Snohomish county, WA, less than 30 minutes north of Seattle/Bellevue (one of the fastest growing markets in the US), one minute off the main I-5 corridor @ downtown Everett. Very high profile, it sees 70,000 vehicles per day going right past the 1/4 mile of freeway frontage. Easy visitor access to and from both directions.

Proposed Permanent Farmer’s Market Development

The highest and best pre-permitted use here is “agritourism,” including a regional farmer’s market and there is no better site in western Washington for that than right here. You might also call it an “Agricultural Disneyland,” but cooperatively operated with 36 individual owners/operators.

For an extensive description of the property. the close-in location and the new farmer’s market development plan, please see: https://drive.google.com/file/d/0BwpQi-jIoigla0Y1Q...

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With the business income value of the lots, I expect that a $36,000/lot selling price will probably end up being cheap. But, for a reselling price safety net, there is also tremendous demand for, and almost no local supply of, small hobby farm lots like these.

For a 1/3 acre or so unbuildable lot, local market values range from $20,000 to $30,000, with few on offer. So, while the agritourism development forces some value appreciation, it’s not by all that much compared to the “normal” lot market value.

There are four blocks in total. I’m keeping the anchor “farm brewery” block on the west side of the graphic to also sell at “retail.” The more successful the adjoining lots are, and the more visitor traffic that they will draw and the more valuable my block will become. So, I have a vested interest in the success of the entire project and I’ll stay as involved as necessary until everything is sold off.

Wholesale priced at a net bottom-line of $83,000 per full block. (If $83k is still a bit rich for your blood, I'll be happy to assist in hooking together BP-based JV's who can share the individual lots within a full block. Please PM me.)

Years in the planning, this development is planned as an agriculturally-oriented commercial mall and it should quickly become a regional-scope agritourism draw. That potential was one of the main reasons why I bought it in the first place. The end lot buyers will be commercial businesses, with extraordinary motivation to keep their payments current.

After purchase, if you want, you can use/assist the cooperative marketing efforts for lots. Or else hold one or more lots off the market for appreciation, or operating yourself, or perhaps a full-block resale to a large buyer. It’s your land and you can do whatever you want with it, but you don’t necessarily have to go it alone. Your choice and there are benefits to each strategy.

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I know these markets, both local land and agritourism, very well and, when these lots are resold at retail with seller financing (@ 8%), I'm expecting that they will fetch at least a 3X ROI, with a minimum market floor value of about 2X. This anticipated profit margin is measured as the net originating cost of the seller note vs. the much higher face value that the sale locks in. No guarantees, of course.

With interest-only payments on the seller's note, you're looking at monthly cashflow of $239 from each lot. Because of the multiplier between the note's originating cost and face value, this should end up yielding an ongoing net ROI in the 16% - 24% range for as many years as you want, but without the headaches of trash, tenants and toilets.

You’re secured by a 1st position lien seller note on the land that you can keep, sell or play, either now or later. Eventually, the note balloons at the full face value of the profitable sale price and you receive a chunk of cash.

Or, your can strategically sell enough of the note's monthly cashflow to recoup your cash investment for recycling into more deals and enjoy the cashflow/balloon-cash later. Building a portfolio of these "sleepers" is one of my personal goals. This same strategy should work especially well with undervalued SFRs, essentially flipping properties as-is for a premium price well-above the ARV, but without any of the costs or hassles of the R.

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I’m know leaving a lot of near-term value on the table here. I’m doing it because I need to raise some fast bridge funding in order to “harvest” the 304 transferable residential development rights credits that this land also contains. These credits can be sold, starting next year, for literally $millions, and that’s my main profit center. These TDR credits do not come with the land sale, so you don’t have to worry about all those details.

My immediate challenge is the Catch 22 that I can’t get these credits county-certified and salable until I first clear the debt from the source land. That’s a total of $250k, which is chump change in comparison to the TDR equity that it will unlock for me. So, leaving a lot of equity on the table is relatively just a small cost of doing business to achieve a much bigger goal and I’m not complaining.

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As an extra bonus incentive, if someone (or a group) buys all three of these blocks in one fast transaction, I’ll throw in a 100% rebate of the purchase price. This will be payable when I’ve sold the first batch of TDR credits, hopefully next year. Since the credit sales will be the big payoff for years of hard work keeping this deal alive, I expect to spend all winter working hard to line them up.

I have more of these types of SSF deals lined up, too. Joining the party now also includes first option on participating in future deals.

To discuss this further, please either PM me or send an email to the address in the graphic.

Thanks!