Goldmine - Worth The Wait?
I have a 0.75 acre lot with 2,400 sq ft house on it under contract for 410. The house and lot would need just a little bit of work, and I could resell it for 460 easily.
Here is my dilemma... The lot is subdividable. If I do this, and build a house on the 2nd lot, I could sell both houses for 460 each... lots more profit eh? But, there is a 2-3 year wait on subdivision allocations. I could rent out the house for just under the mortgage payment, but I would have alot of money tied up in that place for 2-3 years... In 2-3 years, it might be worth alot more though
Just need some opinions...
Be aware, too, of the implications of subdividiing a relatively small lot. People, esp. those who can afford a half-milliion $$ house, don't like being squished too closely together. And it may also be the case that the subdivision allocation is not simply a rubber stamp process...?
I agree w/loon.
I question how attractive a roughly 1/3 acre lot would be to the "higher end" buyer (you said you could resell for $460).
Not only would the houses be "on top" of each other...would they even conform to F.A.R. under the zoning, also open space requirements under zoning?
That's the tip of the iceberg, could the desired home meet setback, offset,...
There could be some due process as a result of this.
Is this lot sewered?
If not, you also have to account for on-site septic which could take up a good chunk of the lot(s).
You're talking about approximately 16,335 square feet with which to work...
Is this a subdivision lot already?
I would do a lot of due diligence on this one.
$410k is a nice chunk o' change to be obligated to.
Remember that not all areas are the same. Buyers in suburban or rural areas may expect an acre or more, but in tight markets like DC and parts of MD, a $500K townhouse is a hot commodity (plenty of inside space, a small yard to play, but little upkeep).
While $400K is a lot to carry for years, it can be profitable. If you can get creative, it may work, but I agree not to get into a situation where you do not have CF.
Try to get the price down so you break even month. Or, see if the seller will finance part of it with a small monthly on a 3 yr balloon. Lots of ways to do it, but recognize the risk.
Good luck.
Peter