Land a Million dollar Development
Investment Info:
Large multi-family (5+ units) other investment.
Purchase price: $225,000
Cash invested: $155,000
Sale price: $1,395,000
We took a piece of raw land through the rigorous seattle permitting process. Project was a mixed use building consisting of 32 micro housing units and 2 ground floor commercial spaces.
What made you interested in investing in this type of deal?
The property was zoned for multi family and no one was buying it. it was a challenging site, but the price was far too attractive to pass up. The potential gain from development was much greater than a flip or other strategy.
How did you find this deal and how did you negotiate it?
This property was on the MLS, we made several offers and kept getting beat out by developers whom would later back out of feasibility. When it came back in market we pushed the price down further.
How did you finance this deal?
We negotiated a seller carried loan for 1 year term. Then paid their loan off and held as cash.
How did you add value to the deal?
We entitled the property for a mixed use building consisting of 32 micro housing units and 2 ground floor commercial spaces. In addition we mitigated some of the more difficult utility items including relocating a power pole.
What was the outcome?
We nearly tripled our money.
Lessons learned? Challenges?
If you get a great price take on a challenge, but make sure you have enough margin to ensure success.
