I got a lead yesterday on a 2/1/1200sqft home on .3 acres that's adjacent to a 4.75 acre parcel bought last year for $4 million to develop high end apartments. When I say "adjacent", I mean it actually borders the larger parcel on two sides and would be the key to acquiring an additional .3 acre parcel on the other side of my lot to fill out the rectangle of the development.
The property is very convenient to a prestigious local university and hospital. Assuming the developer would pay the same price per square foot for this parcel that they paid for the large lot, it would go for twice what the owner is asking.
Assuming this property isn't bought from me by the developer, it would be a great parking lot as it could service the nearby university/hospital as well as provide overflow for the MFR, it could also be potentially be rezoned commercial and be a great restaurant location.
I'm trying to find a local commercial developer/investor to talk through options. My plan is to get it under contract today and hold it as a student rental in the short term unless I can flip it to a developer for a quick profit. I'm looking at a slight negative cash flow if I rent it out.
I'm new to this sort of thing but I really think there's a deal to be had here, it's just not straight forward. Advice? This is the first lead I got from my first letter campaign.
@Luis Toledo congrats on the lead from your letter campaign! The first thing I'd check is what it's zoned for and what the process would be to change it from residential (assuming it's currently zoned for that since there's a house) to multifamily or other uses. I'd also look at the zoning pattern in the area to see what the county wants to do with the land. You can do that by looking at how they are zoning surrounding properties.
Also, sometimes there's a "future land use" study the county puts out that shows where they want zoning to go in the future.
Thanks @Joe Fairless !
I'm not familiar with the rezoning process but am trying to get together with a commercial developer who is. The property is the only SFR zoned parcel on that block. The rest of the block is either parking lot or Garden MFR. I can't imagine meeting any resistance to rezoning, especially for the parking lot option or acquiring a few additional adjoining parcels and rezoning it for retail/restaurant space.
I took a look at the zoning map for that area and it's all zoned CN, or compact neighborhood. Which is basically mixed use medium density residential and commercial. The SFR is actually out of place for the current zoning, but of course it was grandfathered in.
So the numbers are as follow, 160k asking price and rent should be 1200-1400 per month with a little work on the property, basically paint and landscaping from the looks of it. Maybe new appliances. I'll know for sure after the inspection. I'm wondering if it will bring that much as a parking lot with a lot less headache and lower taxes... Taxes are about 1100 per year and insurance will likely be about the same, conservatively. Assuming a 30 year amortization at 5% for $850 per month I'm looking at maybe $200 per month net. Did I do that right? I really didn't want to be a landlord but I figure that's a lot of my market...
So thoughts? Deal or no deal?
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