subdividing and flipping with investor help?

Question

I have been trying to figure out what to do in my current situation to get the most return on my current house if I decide to sell it. In my neighborhood the lots are decent sized and developers have started coming in and tearing down older homes and subdividing into 2 properties then building 2-3 story "tall and skinnies." My current house that was built in the 1950's in current condition would get around $575k; if we put some money into rehabbing the house we could get around 700k; but these tall and skinnies are selling for 1.2M to 1.5M each meaning potentially $2-3M in revenue. So my question is this: would approaching a developer be an option for a better selling outcome? With a HELOC and savings I potentially have around $300k to access for funds going into a deal.

Scott Chilton · Answer

Hey Jason,

You’re in a strong spot here because your property has more value as a development play than just as a single-family home. Putting money into a rehab might get you to around $700k, but the real driver in your neighborhood seems to be the land and the ability to build new construction. Developers are looking at what they can sell those tall and skinnies for, not the condition of the existing house, so approaching a few of them to see what they’d offer is definitely worth your time.

Since you mentioned having access to about $300k, another angle could be partnering with a builder instead of selling outright. That route comes with more risk and complexity but also the potential to share in the upside. If you’re not looking to manage a project, though, selling to a developer directly is usually the simpler and safer path. Either way, the next logical step is confirming your zoning and getting some real numbers from local builders so you can compare your options with confidence.

Michael Hernandez · Answer

Jason, you’re in a strong spot, especially with developers already active in your neighborhood. Selling directly to a builder is the cleanest play—fast and certain, though you won’t capture the full upside. Putting some of your $300k toward surveys, engineering, and permits to get the property entitled could bump the value significantly without taking on construction risk.

If you want to go bigger, a joint venture with a developer lets you bring the land and some capital while they handle the build, giving you a share of those $1.2M–$1.5M sales. Rehabbing the existing house is an option, but likely leaves money on the table compared to what the land itself is worth.

The key is deciding how hands-on you want to be and whether you’re comfortable tying up funds for 12–18 months. I’d start by getting developer offers to set a baseline—then weigh rehab versus entitlement or partnership based on those numbers.

Deborah Wodell · Answer

Jason, you’re in an interesting spot that a lot of people with older homes in hot redevelopment areas run into. On paper, the numbers you’re looking at with the “tall and skinnies” seem tempting, but there are some key things to weigh before diving in.

If you go the rehab route, you’ll spend less capital and time, but your upside is capped at around $700k. Developers paying $575k for homes like yours aren’t buying the structure, they’re buying the land and the opportunity to maximize its value. That’s why they can pay a strong number and still make sense of the deal.

If you try to play developer yourself, you’d be looking at rezoning, permitting, carrying costs, construction management, and the risk of things going sideways. Even with $300k available, you’d still likely need to bring in partners, private money, or a developer to handle the heavy lift.

One path some owners take is approaching developers directly, not just as a seller, but as a potential JV partner. You contribute the land, they contribute the development expertise and capital, and you share in the upside. It’s more complex, but it’s how some people bridge the gap between a simple sale and full-blown development.

If you’d prefer less risk and headache, selling directly to a reputable developer now might actually give you a better outcome than rehabbing, since they’ll pay based on the land’s future potential, not just the house’s current state.

Bottom line is weigh your risk tolerance. If you want certainty and less stress, talk to a few developers and see what they’d offer. If you’re open to taking on more complexity for a bigger upside, you could explore a partnership model.

Ky Perry · Answer

Great question! You’re smart to look at all your options before making a move. If developers are actively buying in your area, you might get a higher price selling directly to one since they’ll factor in the value of the lot rather than just the house. On the other hand, if you put $300k into a rehab, you’ll want to make sure you’re not over-improving compared to what buyers are paying for finished homes nearby. One thing you could do now is get both a market analysis of your home ‘as is’ and also talk to a couple developers to see what they’d pay for the lot. That way you can compare the numbers side by side and decide whether selling retail, rehabbing, or going the developer route gives you the best return.

Peter Mckernan · Answer

Hey Jason! That would be solid to build, do you know all costs involved? Holding costs, permits, and build. These numbers are critical to see what is best for the property. If you rehab the property say put $25-$50K how long will that take and can you turn it to sell it for $700k? What did you buy it for and so on. These numbers give you a better idea what is the best move for you today and in the near future.

Jay Hinrichs · Answer

Talk to tax man  if you sell individual houses you will lose your 121 tax free and have to pay the highest rates.. many times for a little extra money the risk and work is not worth it unless this is going to be an on going thing.

I wonder if whats happening there is builder/developers are just replatting or confirming underlying lots that were consolidated years ago.. thats a huge deal out west ..And I helped a BP member find that hidden gold on a project she did in Nashville.

Jeux Marseille Fajardo · Answer

Hi Jason,

I’m still pretty new to real estate, so I’m in learning mode, but your situation caught my eye. The way developers are moving in and changing the neighborhood sounds like it could be a big opportunity. I’m curious to see what more experienced investors here think about the approach with developers vs. rehabbing yourself. Thanks for sharing—it’s really helpful for someone like me just starting out to see these kinds of real-world scenarios.

Luka Milicevic · Answer

Your best option is to reach out to me, partner on the project, we build both units and we sell. That's the highest outcome for you.

Or....you decide to keep one house when they are done as a primary, STR the other side using Nashville's HPR STR allowance

Or....you keep one house and just sell the other making your base in the other house super low.

So many exit strategies on an R lot

Jason Braddock · Answer

Thanks for the replies. this was a new option that I started considering and needed this advice to see which direction to go. I have a realtor in my neighborhood I plan to contact about these options and a couple developer names I have come across, but will definitely find a tax expert if I choose to pursue, but I hadnt thought about the loss of tax incentives for my primary residence. I also have no idea about permit costs for splitting properties, new utilities, etc. so thanks for giving me several things to research and consider!

subdividing and flipping with investor help?

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