All Forum Posts by: Eric B.

zoning zoning zoning.  Most communities simply dont allow this and are disinclined to change the zoning or allow a variance.  Forward thinking communities like Portland or Olympia may be allowing one off projects but if you google ny times gibibg homeless homes you shoukd come up with thw article (im on my phone)  note that Olympia only did it to give houses to homeless and they located it on marginal land adjacent to an industrial park.  Its my opinion but most traditional residential areas would fight something loke this.  What is the advantage over a mobile home park?  There are areas where that is allowed and a moblie home allows economies of scale which would be important for such small affordable home.   

I have a lot that I would love to build a small house on but I would need a geotech report and there are some protected trees on it. Which is why a small home would work but it would need to absorb the 20k in reports and need a retaining wall and wall design.  So that would push the cost per square foot.  The only way i see to get the per square foot down to normal levels is to uae a moblie. Which of course is expressly foebidden by code.  End result?  Vacant trash strewn lot.  Sad.  

Love the idea.  Work on pull with your local building council and start attending meetings.  Good luck.

@Bill D. I like your approach. 3 to 4 years implies a rate of return of 33% to 25% on your marginal investment.  Which is hard to beat by say buying another property or some other opportunity.  We are really nibling around an ecomnomic concept here called "opportunity cost".  

@David Semer Your welcome.  Explaining things to others is the best way to get something straight in your own head so this benefits me too.  Google "opportunity cost" that might help you a bit.  Dont forget also one in the hand two in the bush which is to say dont invest everything you have trying to maximize return.  I also have to remember that because I'm an optimizer and want to keep all my money working.

For me I do valuations based on rent.  So I look at what the rent increase would be for a finish and then compare that to what it would cost.  Then I break that down into a rate of return.  For rehab flips that could be tougher but I think that my approach can be a nice way to value your marginal improvements.  I also initially want to over renovate most projects but the numbers need to tell you when to stop.  My wife is also a great emotional break on my ambitious plans that I hatch.  Its good to have a team member like that.

Donny is right.  

In my target area... two words of caution:

Prowlers are not welcome and make people nervous.

If you are spotted and remembered it will make it harder to negotiate..... Possiblely.

Other than that snap away.

Well not quite sure I'm putting this in the right place.  Please advise:

Working on a deal that is a potential rehab and hold. Family home on a 4000 square foot lot that is only 40 feet deep.  The house is sitting very close to the lot line.  The seller seems to think the lot line goes through the house. Im not sold on that but its close.  Seller owns the lot behind that is 75 feet deep and 100 wide for 7500 square feet.  Just to complicate the issue the area just past the lot line has a steep slope of about 20 foot vertical drop. Upper and lower areas are very flat.  While the county has the area as a potential slide area my professional experience in the area says the slope is very stable and not a concern.  Just to complicate the picture the lot behind the home is almot completely covered in Oregon White Oak which is a "locally important habitat" and is mapped as such by the state DNR.  Development of either lot would require a geotechnical report with soil pits and a slope stability analysis for about  $10000 to $15000.  Development of the vacant lot would require a biological assesment at an unknown cost and unknown outcome.  Seller is not interested in a lot line adjustment and would simply like some compensation for the vacant lot (my agent thinks $5000 would do the trick just to make them feel better).  Home is below replacement cost (barely) and smack in my target area.  Unless property values doubble the vacant lot is not a good development target (and perhaps even then).  Its basically a maintence and tax liability. It will cost me $400 to $800 a year in taxes.  It does boost the value at resale of the home as the trees and view in the winter is better than looking at a house.  Hard to quantify what the value add is..... perhaps 10k to 20k.

Some ideas i have are:

Grab the lot and:

Sit on it.  If the market goes up enough it might be worth adjusting the lots and spec building.  

Adjust the lot line then donate the land to the county parks department as an open space restricted area.  Or find some other charity to donate it too.  That will save me 400-800 a year....

Just recombine the lots as the lands best economic use right now seems to be as a backyard.

Some other option:

 negotiate a lot line adjustment prior to close and only buy the house.

Walk.

Thoughts comments?

Well sounds good glad it worked out for you @Vonetta Booker .  I just did a similar thing.  Ran into a seller that was being really stubborn two weeks ago and something else came on the market last night.  We inspected this morning and are offering about now.  Also leased my last aquisition from last month at the same time.  All before kickoff.  Sweet.  Go Hawks!

Good job!  I personally preinspect and then waive the insp contingency. It just makes my bargaining position stronger.  It helps that i can do my own.  But i take my time.  Usually in the two to three hour range.  I would just kick myself too hard if i missed something major.  It could still make sense to pay for an inspection pre offer especially if the pricing is good.  Just the cost of doing business.  If you do enoigh deals your inspector might just cut you a discount.  Worth a try.

25% down 25% return.  Personally I dont waste time with anything under 10%.  20% and above is go time.  This can be hard to do.  You have to bring alot of value to your tenants to get those kinds of rents around here or get a real deal of a unit or otherwise add value to the property without injecting a ton of cash. Under 10 to 15% and other investments look like alot less work for nearly the same return.  Good luck!

ooh good point @Roy N.  Not sure rock wool will be required but 5/8" is highly likely and hat channel or something similar is a great idea either way.  You can check up on your requirememts with a visit to your permit desk for your jurisdiction.  Often there are parking and other requireements thay you moght not of thought of.  Course your zoning may or may not allow multi.  All good stuff to look into.

Go Hawks!

I personally think that "that [real estate] action" truly comes from putting your own money to work.  Find away and the dollars roll in even on off days.

Good luck!......BOSS.