Adding acreage to property valuation?

Question

My parents own a 0.58 acr business property on a main road that is growing. Their building is in poor condition. The neighbor has 0.17 acr with a run down non approved duplex. Owners are a dad and a son who own 50/50. Son needs money and is offering to sell us his percentage on the home. Area is really booming with lots of construction

Complex, but upside could be nice. Just trying to think how this could work and need someone with experience. In the past my parents have been approved for multi family but did not proceed.

Endgame: make condos or try to just keep the rental.

Thanks

Brian Christensen · Answer

Thanks for your reply. The land records show only 823 sq feet, but they dug out the basement years back- without permits. The son said it was not zoned for multi family. Actual sq ft may be near 1200, but I haven’t been in the house yet. Seller is very motivated, unsure of his dad. My parents approached me to help them evaluate the deal. I my opinion my parents should demolish their own building and build new- multifamily and if they can get this extra land it would help. I will get a CMA, but I expect:

ARV- ~240k, rehab- 25k, currently rented $1400/mo. Ins: $650, taxes: 2400/yr. owners owe 95k

John Teachout · Answer

The duplex is a converted single family or there wasn't supposed to be a residential property there? How do you know it's "non approved"?

I think buying "half" of a property is pretty useless. Check to see if the dad wants to sell too?

Any potential to fix up the property on your Dad's lot?