Lot in Raleigh. What would you do?

Question

Hi,

My parents own an acre lot, vacant, in Wake County. All neighbors have various sizes and ages of houses. There's not much conformity.

Knowing the final decision is theirs, at the very least I'd like them to make an informed decision. They don't have to sell, yet I'm fairly sure they don't want to deal with building and renting (which is what I'd like to see, but it's not up to me).

So to show them educated options, I'm curious to what you would do with this land?

Thanks for your time to read.

Account Closed · Answer

Account Closed

Happy to help!

Might be beneficial to talk to some lenders in the area while you do your research. If you build on spec, they want to see prior experience - that's key in getting those spec loans from the few that offer them, as well as being properly capitalized. Presale would be easier to fund, as well as build to rent.

Keep us posted and best of luck!

Scott Hollister · Answer

Account Closed what would be the comp for the type of house they will build?

What is the cost per sq ft to finish?

I think they should weight out both options.

• Build and sell. 
• Sell lot

See what the total return is on both and weigh out what your time is worth on building and selling.

Account Closed · Answer

For anyone relating to this situation or curious, here are posts I read that helped.

• Cost to build a Duplex
• New Duplex/Triplex/Fourplease Design & Build - Metro Portland
• Build a duplex or waste of time?
• Is it possible to build a duplex with zero out of pocket? Would this method work?

I still have to check zoning, but I found one comment really stood out ...

And that sent me down a modular research rabbit hole. It would best conform with the neighbors.

Account Closed · Answer

@David Mohrmann I appreciate you so much right now. I've researched the general area and think it's a good long game opportunity. It's a bit of work figuring this out. I'm using my old real estate agent skills, but this investing side is all new. Wish I learned about it when trying to be an agent! My data/stats/analytical/math brain is more suited for investing. It's way more fun.

Account Closed · Answer

This! Huge thanks @scott hollister for the short and sweet first step. That's what I'm doing now. I found advice about building modular for the cost effectiveness. Some neighbors are modular, so that may work. Ultimately, what's better math. Thanks man.

Account Closed · Answer

Account Closed

A lot of what can be done with the lot depends on the zoning and availability of city services and utilities. That should help you in determining highest & best use.

At the end of the day, if you are looking to build to rent or build to sell, you need to find out the zoning (commercial? industrial? single families only? How many? Apartments allowed? How many stories?, etc.), is the lot infill, do you need to re-zone, are water/sewer available (if not, get a soil scientist to test the soils), impact/tap fees, etc.

Once you know what you can and want to build, start interviewing architects/draftsmen, builders, etc. Walk their past projects. Ideally, they should be able to steer you in building and designing to your aesthetic and can advise on how to save on construction costs.

Nail down funding. Spec loans are hard to come by. However, owning the lot outright usually is good enough equity. However, it is nearly impossible to get a spec loan with no prior experience. You might want to then partner up with the builder. If building as a home-owner, different story.

Sorry not able to get into too much detail here. I would advise you first to talk to Planning.

Best of luck!

Account Closed · Answer

@Betty T, no apology necessary. This was amazingly detailed. That's also why my parents wouldn't do it. If building a place were to happen, I'd have to do these things. I'm game.

Funding would be okay. They'd qualify. Yet they're very old fashioned and risk averse, so I'd have to present this well. Thanks Betty.

Account Closed · Answer

Thanks @Caleb Heimsoth ... I'm finding a lot of similar advice about building ROI ... bad timing right now.

Account Closed · Answer

Quick note. Thank you to all those taking time to reply! Sorry for not responding sooner. I'm not getting notices by email or on my app. Maybe it's on me. Will check. I seriously thought I had an awful post.

Since, I've done more research here on BP and elsewhere. I'll update what I've found and reply to you awesome people.

Lot in Raleigh. What would you do?

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