How do I Comp A Brooklyn Property on a block full of relatively new Duplex & Triplexes when I know the existing house will have to be torn down before a new one can be built? Do I Comp it against Improved Land sales or the newer structures selling on that street even though it's unknown exactly what the new structure will be ? The lot is a little smaller than most on that block as well. Can someone offer some area insight as I've only just moved back to NY a month ago?
It depends on the final goal of your project. From my experience if you want to build ground up it does not matter of what the market value of the vacant property is. All that matters is if your doing new rental construction, that you are aware of what your rents will be once your building is completed. For condos, its the same thing except that you will need to know $/ft for sell-out. I can give good detailed explanation of this through the phone, since i have been exposed to 4 deals like this.
@J. Lancaster I haven't done anything like this, but to consider it, the comps in the area would have to be able to support the cost of whatever you want to build. If the properties in the area are appreciating in value and there is other new construction nearby, it may be worth doing? Otherwise, new construction amongst older structures that aren't appreciating would be a bad investment. IMO.
@Robert Leonard How're you doing? Thanks for the feedback. Yes, It's all pretty much new construction on this street. I'm specifically trying to find out if I'd have to comp it the normal way against Houses Sold since it's just a shell or against Improved Lot Sales knowing it'll have to be torn down? On top of that NY is just a completely different type of Animal nothing like the markets the people were in that I've used as my study guides. It seems that both sides are represented by a lawyers in EVERY RE Transaction in NYC without fail. ( I'm checking to see if that's a Law) That's why I was hoping I could get some feedback from a few local investors on BP familiar with the landscape.
How would you Comp it & why?
The value of the lot will be the comparable price for vacant lots, if there are any, then deduct the costs of demolition and removal. There is no relation in price between this one, and other habitable structures.
@Martin Shlakman Yes, I'd really appreciate that. I'm pretty sure I can get this under contract. Knowing whether or not I should Comp against new construction/areas sales or just Lot Sales in NY is a substantial difference. My number is (347)618-1839.
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