We are looking at an empty lot in modesto. it is currently R-2 zoned and it is about 28,000 sq ft. Last time I checked with the city, they said we can only build a duplex on it cos the site has no public sewer.
Anyone has experience in building duplex or putting a manufactured home in an empty lot in around Modesto? I want to find out how much would it cost to build a duplex and want to see if it is worthy to do.
thanks in advance
It really depends on your exit strategy and your opportunity cost to do this investment instead of something else.
If you plan on selling once completed, you'll probably make some good money (all depends of course, you should know what you plan to sell the property for once it's complete).
If you plan on holding for the long term, analyze the rents and potential return on investment vs your other investment options. Modesto doesn't have a strong varied economy like Stockton, Modesto or Fresno does, which is why it doesn't show up on the top 100 markets in the nation for 2017 and those other cities do.
It's a little podunk town close to the heart of the central valley, so much jobs are low-paying jobs in agriculture (often performed by migrant workers or illegal immigrants). So much so that the Pope recently held a conference there about issues affecting those communities.
So long term, it won't have the same rental growth and appreciation as Sacramento, Stockton or Fresno, but it still may be a good deal if done at the right price with the right exit strategy and business plan.
Best of luck!
Typically building a duple / triplex makes no sense because you can purchase them under the value it costs to build them (land, permits etc, building costs), and when it comes to renting them out you will not get a premium because they are new. All multiplex tenants are looking at is number of beds, bath and how much the rent is. Since they are not buying it they don't care if it is new or old. And if you are selling it the buyer is an investor who will look at how much rent he will be able to get.
Building a single family house and selling it could be profitable because you are selling it to an owner, and who would not want to pay a bit of a premium for a nice new modern house? Even then though you'd have to consider, what do you have as a compentative advantage that someone else does not? Can you build it yourself? Do you have free land, or a special buyer lined up? If someone else is not doing it there is probably a reason. For example I know that in Stockton the permitting itself is really expensive...
Anyway, i hope that makes sense!
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