I am new to BP. And this is my first post! Nervous but excited. So if this post is not perfect or missing a detail just post and ask and I will respond and I promise I will get better! I have been listening and watching bigger pockets for awhile now. Anyways let’s get to the deal. Or situation I’m in.
I have a .44 (19,000sqft) 97x 200ish) single family Vacant lot in downtown Celina TX. My father bought it for me in 2002 for $22,000 as a “just in case” investment. And held it since.
If you are familiar with this soon-to-be big city. Then great! You can help me out. I know everything about celina and how it’s growing I’m stuck in a hard decision I feel like.
My goal is to use this lot (that I own free and clear) to start my real estate investing career. I have had my real estate license since 2017, and have been studying a lot about real estate Investing. And would like to start having cash-flow properties. Maybe start using the BRRRR method.
What would be the best way to leverage or use this lot that I have to start investing in real estate?
Sell my lot. Now I already put up a for sale by owner sign and have received plenty of phone calls. My best offer that was sent to me was a $120,000 cash offer, no option. So this option is still available since we have made a good connection with the buyer. Then I could purchase my own property. Brrrr and repeat.
I have contacted the city about zoning change as well as building a multi-family unit. (Duplex, quadplex). Currently my property is zoned single-family. The city replied and said that the city is finalizing all new zoning changes in 2019. And my property is able to build a multi-family house with permits and plans required. However, I don’t have a down payment for a loan or the credit. So I’m kinda stuck. The city even said that there could be a possibility that my lot my become a commercial property.
What would be the best way to use this vacant lot to start REI?
Here is the kicker:
there is a vacant lot next to mine that is the exact same size also zoned SFR. The lot on the right side is a commercial lot C-2. Maybe some warehouses.
I told the city city that maybe my multi family lot could be the buffer from commercial to SF homes. And they said show us the plans and we can work it out.
Across the street is what is soon to be more vacant lots as there is a old metal building workshops across the street along with another vacant lot. So the surrounding area is going to be new builds eventually. Either housing or commercial.
If you have gotten this far, thank you for your time! And if you have anything to share please do!
once again thank you! Look forward to being a active member here on BP!
Dont have the time atm for a long post so I'll will just add this real quick.
You will not need cash for the down payment on a construction loan. Since you have the land free & clear you can use that as collateral. Now how much you can use of that $120k value is up to the bank. I've seen ranges from 50%-80%, typically. But for construction, especially MF, you will need cash for all the soft costs, which are permits, architect/engineering fees, utility hook ups, etc. You might be able to just get a cash loan from your bank on the equity in the property to pay for all this or maybe not. But theres an option for you to look in to.
Awesome! Yeah I’m going to look more into that. Thanks!
@Daniel Mendoza , what is your ultimate objective, SFR, Multi-family, etc.? Very difficult question to answer without knowing some more details on what you're trying to accomplish. For example, if your goal is to own 10 SFRs within 5 years, then the advice you get may be quite different than if you say that you are all about Multi-family. What I would do may differ greatly from what you would do.