Build to Rent 10+ Duplexes on fully owned 5 acres

Rental Property Investor · CA · Member since 2018 · 12 posts · 5 votes

I purchased a 4.7 acre parcel that’s walking distance from a high school in a fairly populated neighborhood. It’s surrounded by a B+ neighborhood of SFRs. A few questions:

- How do I collateralize the land to support funding for the build? 7000 sqft lots subdivided go for about 15k in this area. SFRs sell for 200k- 250k. Builds go for $100-$140 per sq ft.

- Would you build SFRs or duplexes? I count the ability to build 12 to 16 7000 sq ft lots. I spoke with the area councilman who advised against multi-family. Not sure if that matters much.

Any advice would be helpful!

1 Reply

28 views

Most Popular Reply

Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

Quote from @Matthew Paul:

The best bang for your buck would be townhomes , then duplexes , then single family . But pushback from neighbors and the council can be costly in time and money

Other than the product .. your land values are so low that you dont have much if any equity as doing the underground (Horizontal) will cost as much or more than the lot values.. so if finished lots are only worth 15k then I would think the 4.7 acres has zero value .. since you will be in the lots more than they are worth to develop them.. this is a common problem in low value lot areas or INNER cities were you can buy lots for 1 dollar to 10k that already exist and have all utls.. Unless we are missing something here.

@Eric James U may want to communicate with Eric he does this same thing in I think W Texas and makes it work. but he is totally hands on from what I have read here on BP

Podcast Guest on Show #222

JLH Capital Partners51 Review

Website View Page

3 Reply

See this reply in the discussion

5 Replies

Jump to latestLatest

Sort by

Jaycee GreenePro Member
Real Estate Consultant · St. Louis MSA · Member since 2024 · 3k+ posts · 726 votes
1y
Quote from @Darren James:

I purchased a 4.7 acre parcel that’s walking distance from a high school in a fairly populated neighborhood. It’s surrounded by a B+ neighborhood of SFRs. A few questions:
- How do I collateralize the land to support funding for the build? 7000 sqft lots subdivided go for about 15k in this area. SFRs sell for 200k- 250k. Builds go for $100-$140 per sq ft.
- Would you build SFRs or duplexes? I count the ability to build 12 to 16 7000 sq ft lots. I spoke with the area councilman who advised against multi-family. Not sure if that matters much.
Any advice would be helpful!

Hey @Darren James, welcome to the BP Forum! What city/area is this in?
In reality, local council members can come and go, but if they are against your plan, they can make it very difficult for you to get the needed approvals.
[email protected]
2 Reply
Matthew Paul
Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes
1y
The best bang for your buck would be townhomes , then duplexes , then single family . But pushback from neighbors and the council can be costly in time and money
1 Reply
- Jay HinrichsBusiness Member
  Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
  1y
  Quote from @Matthew Paul:
  
  The best bang for your buck would be townhomes , then duplexes , then single family . But pushback from neighbors and the council can be costly in time and money
  
  Other than the product .. your land values are so low that you dont have much if any equity as doing the underground (Horizontal) will cost as much or more than the lot values.. so if finished lots are only worth 15k then I would think the 4.7 acres has zero value .. since you will be in the lots more than they are worth to develop them.. this is a common problem in low value lot areas or INNER cities were you can buy lots for 1 dollar to 10k that already exist and have all utls.. Unless we are missing something here.
  
  @Eric James U may want to communicate with Eric he does this same thing in I think W Texas and makes it work. but he is totally hands on from what I have read here on BP
  Podcast Guest on Show #222
  JLH Capital Partners51 Review
  Website View Page
  3 Reply
- Eric James
  Investor · Malakoff, TX · Member since 2017 · 2k+ posts · 2k+ votes
  1y
  Quote from @Jay Hinrichs:
  
  Quote from @Matthew Paul:
  
  The best bang for your buck would be townhomes , then duplexes , then single family . But pushback from neighbors and the council can be costly in time and money
  
  Other than the product .. your land values are so low that you dont have much if any equity as doing the underground (Horizontal) will cost as much or more than the lot values.. so if finished lots are only worth 15k then I would think the 4.7 acres has zero value .. since you will be in the lots more than they are worth to develop them.. this is a common problem in low value lot areas or INNER cities were you can buy lots for 1 dollar to 10k that already exist and have all utls.. Unless we are missing something here.
  
  @Eric James U may want to communicate with Eric he does this same thing in I think W Texas and makes it work. but he is totally hands on from what I have read here on BP
  
  I don't subdivide and am outside city limits in TX, which means no zoning or building restrictions.
  1 Reply
Darren James
OP
Rental Property Investor · CA · Member since 2018 · 12 posts · 5 votes
1y
@Jay Hinrichs
Thank you!
0 Reply

Join the conversationCreate a free account to reply, vote on answers and follow this thread.