Going big! We are concidering a teardown and rebuild.

11 Replies

We found a property that has two condemned homes. It is a REO listed at 86000. We are going to see it tomorrow. Per the agent it is of course cash only, vandalized property no electric due to no payment of bills ect. So we will be starting from scratch.

It is on a 10000 ft sq lot it has two homes and some outbuildings on it. Its in the country but with city water and sewer.

I was looking for advice and any blogs with experiences like this! If we get the property I will surely post updates!

I have done infill construction of new homes in Maryland for years.  A few things to look into:

Check the cost of upgraded water service if you are on public water and sewer. In parts of Maryland you need to get a toilet count on the existing home to receive credit for them toward the cost of the new water service.  Also check the laws involved with differing the cost of the upgraded water service, this is called a "front foot fee" in my area.  

New homes in some parts of my area require a sprinkler systems. Those systems require a larger 1.5" water service and the upgrade can get expensive! 

If you are not on public water and are on well and septic check the septic laws and make sure your septic area will handle the required # of bedrooms.  Do a yield test on the well to make sure it meets the minimum requirements for the new homes. 

Check for height restrictions and or story restrictions.  For example one jurisdiction in my area only allows 2.5 story homes.  Basement  + first + second = 3 stories.  If the basement level is in the ground by a certain percent it is considered a "cellar" and not a story so you are clear at 2 stories.  The height restriction is still in affect. 

We now have storm water requirements on small lots... Dry wells are required to "store" the rain water on your lot from all impervious surfaces for 24 hours, including the driveway!  Yes you have to drain your driveway water into a dry well.

That's it off the top of my head.

Hi Mary Lou, How is the lot deeded,  as a single or as a separate lot per house? What would it take to subdivide?  What are comps in the area. If your considering total demos and new builds, ask about any grandfather advantages that there might be and take advantage of them if they exist. oftentimes if the foundation and drainage are bad with beat to death houses,  a complete do-over from the ground up makes sense.  Easier sales at the end because there are no legacy problems to explain away. It's all in the numbers. Good luck !!


@Kelly R.  

 I am going to the planning department tomorrow to ask lots of questions and this will be one. I did find from the county tax assessors site,  that the property type is listed as


I am hoping it means that if we tear both down we can rebuild two. But I am going to check on this as well. There is a parcel next to this one that has been split in two. I do know on some of these properties the only way to get two homes on one lot, is to designate one as a "granny home" and has to be occupied by an elder.

Even if this doesn't pan out I am know I am going to learn a lot, so this still will be a great experience!

Thank you for your advice!!!

i made the offer! It was based  the value of the land. Now the wait.

I did find that if we put the new homes in in under two years we save 8000 in fees! And we dont need to leave any exisitng walls up  either. If we go bigger we just pay the difference in square footage.

Im thinking of other outs as well. If we just do the demo get the permits and plans in place, along with the utilites, ( needs new meter and line to pole, ) would that be attractive to a a buyer who wants to take over and build? 

Almost like just rehabbing the land! 

Electric disconnect:

If you plan on building consider your temporary power pole now.  It will cost less at this time because they just swing the existing wires over to the new temporary power pole.  If you fully disconnect and then call them back for a temporary power pole connection the fee goes way up in my area.  I always spend the extra money on a temporary power pole.  Nothing worse then generators screaming all day long next to your neighbors on in-fill construction sites. 

New Power:

They can not connect new power until the home is constructed, a new meter is hung and temporary finals (TPF inspection) are in place.  The power company will also need the lot final graded to (usually) within 6".   A load calculation sheet for each home along with a full site plan is needed. 


Permits and plans would lock the potential buyer into your house plans. If they wanted to make changes they would have to back to revise permits.  It might be better to secure a letter stating the land is ready to be developed.  

@Kelly R.  thanks for your response! There was existing power to the house. It was disconnected in 2012 due to non payment. The breaker box is all broken and there is no meter. Luckily pg&e said once the breaker is replaced and inspected they will return power at no cost. That was a relief!

Trying not to get too freaked out. But the best way to learn is by doing....and there is so much to learn! 

If offer is accepted we have a 15 day close. We are also looking into the 203 loan program.  Also discussing our roles and how we will each pay and/or disburse the funds if we do sell. It is my boyfriend and i partnering on this. 

Have a great day! 

Im thinking of other outs as well. If we just do the demo get the permits and plans in place, along with the utilites, ( needs new meter and line to pole, ) would that be attractive to a a buyer who wants to take over and build? 

Almost like just rehabbing the land! 

This could be a viable option and is worth pursuing. If you can put a considerable amount of your expected profit in your pocket without taking the risks inherent in the build and sale it may be well worth it. You gain considerable experience, make a profit and get to watch the rest of the project from the sidelines. It would be quite instructional when you decide to do your next project.

@Kelly R.  

Well they rejected the offer. Going to keep an eye on it. Curious to see if it does sell and for how much. We offered 17900 and its listed for 85000.

 The address is 725 Kibby, Merced.

Can you build 2 houses at 3/2 at 1800-1900 sq.ft? maybe they will sell at 280k-300k (2015 construction) each. Cost to build is around 130-150/sqft. Within a year.

@Manolo D.   That would be great provided we had the property and funding! I dont think we could sell each as its one piece of land. And we couldn't split it. 

Our plan was to build a 2bd home over a two car garage to save space. And build a 3 bd in front. But the bank rejected the offer.  

Property is still there..but has dropped to 73000.

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