Things to consider before buying a lot

[Gaurav Mehta]

Hi,

I am looking to buy a vacant lot (around 3700 sq ft) in Oakland Area. It is zoned as Multi Family. Looking to buy with all cash (funding from myself and brother). Plan to build a duplex and rent it out.

Some questions to consider before buying a lot

1. What are somethings to consider before buying a lot. I know about checking for (zoning, floodzone etc.) but I am guessing there are a lot more things to consider.

2. Any idea of how much would it cost on average to construct a 1600 sq ft 2 unit house. Been reading about $150 /sqft. Not sure how accurate is that. Can someone help provide some ballpark numbers with any overruns that may happen.

3. Any idea on time frame to build the house (6 months, 12 months or more)

4. If anyone has an experience with a realtor who specializes in Lots, can you also please DM me their details

5. Any additional challenges that someone may face in buying a lot and then building a house to rent

[Arlen Chou]

@Gaurav Mehta that seems like a lot of work for just 2 rentals... but assuming the numbers work here are a few things to consider:

1. Oakland is pushing to impose an additional tax on vacant lots. I am not sure how they will enforce this, but there has been some news floating around about this topic that you might want to research
2. The cost per sqft number you are using seems crazy low. Keep in mind that contractors are in HIGH demand right now. All of the fires in the north bay have pulled many of the second and third tier guys away from the area to build new homes.
3. The timeline also seems extremely aggressive. But I am not sure if you just mean the physical build or design to completion as your time reference. 

For all of the time and effort that you will undoubtedly spend on a project of this size, I really think you are better off finding an existing property. The discussion would be different if you were going to build them and sell them off as condos or as a duplex.

Good luck,