Zoning Issues

 "Change your results by changing your behavior."

That statement has definitely been true for me as of late. I've finally started taking action, picking up the phone, and submitting offers which has really skyrocketed my education! Data + experience = knowledge/wisdom! 

To give an example, the other day I was driving to the happiest place on Earth or as some of you might know it...the DMV. (Is it weird that I had a strong urge to yell BINGO! and run to the window like I was on the Price is Right when they called my number?) On the way there I passed by a couple of properties that were completely boarded up so my interest was peaked. Usually I would just keep driving and promise myself I'd look into it later...then forget about it. But I told myself I should stop and check out the place. I snapped a picture of the sign out front with the Listing Broker's number and called them up a few days later on my lunch break. 

What I found out was that the two houses that I saw were actually zoned commercial but the developer ran out of money and couldn't develop the 5 story office building, so the houses have been rotting there for the past 5 years! I thought, "Hmm, 5 years...they must be pretty motivated to get rid of these properties." So I ran some comps for residential properties and decided that I would try to buy them as commercial land and wholesale them them residential properties to an rehabber. 

I submitted an offer for about 40% of the bank's asking price and they countered by lowering the price by $13,000. I countered by raising my price by $10,000 and offered the listing agent a $1,000 bonus at closing but they wouldn't budge, however, the Realtor did say he was trying to convince them to reappraise the property which may result in them justifying dropping the price even more! The only problem is that he didn't know when they appraised it last and they have to wait at least 6 months to do a reappraisal from the last time it was done. So now I'm learning all about how the banks like to drag their feet. :)

I started researching zoning restrictions and now I'm thinking I won't be able to wholesale the property as I had originally planned. Now I'm thinking I should search for a commercial developer that might want the land itself or rehab the houses and rent them to businesses. There doesn't seem to be a lot of info on wholesaling commercial land/properties so I guess there will be more lessons learned from this experience.