Modular Development - Duplex to Quad

[Subbu C.]

My first post and request you to guide/correct of anything that I didnt follow or may have missed :-) .  I have bought and sold few investment properties in the past and currently holding couple of rentals.  Raising housing prices made it difficult to find a right rental that satisfies the numbers.  I have been looking for alternatives and started researching towards land development for rental properties.   Before getting into details let me provide some goals to maximize long term steady returns that are learnt from past experiences:

• o  Acquire and hold as a long term rental.
• o  Find a property in a good rental market to minimize or avoid vacancy.
• o  Minimize maintenance cost by building new or acquiring newer properties.
• o  Avoid HOAs completely (about $100-150 for a $1200-1500 rent in the area).
• o  Acquire the right property type that is mostly sought after in the area. (within subdivision,  parking spaces etc)
• o  Close to big employers and avoid those sensitive areas.
• o  Good schooling districts, easy access to public transportation etc.

After some extensive research and to satisfy the above said points I have decided to acquire a land to build some rental units.   My search lasted for about an year (have bought another rental during this time though it didnt satisfy all the points) and I ended up buying a .7 acre lot that goes well with almost all the above said major points. The lot consists of three residential sites.    Had confirmed with city planning before buying the land that each site can have one Dwelling Unit (DU)  or a two-family housing (two individual DUs),  and a possibility of a Duplex in the future.   Last week city has approved  a new Ordinance with an aim to encourage more housing options in a much smaller lots (min 5000 sqft),  the one I have been waiting all these months.   The new zoning changes provided more options and please feel free to suggest your thoughts along with pros/cons that you think of:

• Option 1) Building one duplex on each site =  3 duplexes.
• Option 2) Sub-divide into smaller lots and build duplexes = .7 acres is ~30000 sqft / 5000 sqft = 6 sites with a duplex on each (Corner lot with roads on both sides)
• Option 2a) Sub-divide into smaller lots and sell couple and use the funds to develop the rest.
• Option 3) Explore possibilities of combining three lots and have two quads or a multifamily (rezoning is needed and likely to be approved)
• Option 4) Explore possibilities of rezoning as a Light Industrial or Office Use and construct office spaces or Day Care etc (Corner lot with commercial presence across the street.   Rezoning seems to be a possibility)
• Option 5) Re-assess the land value and sell for a profit.   This is my least preferred one yet qualifies as one of the better options.

As you could see the first three options provides a flexibility that I can work on one site or duplex at a time that helps in finding a bank to finance the project. I have approached few local builders and the stick build cost is going through the roof with a wait time close to an year or more (they all seems to be busy). I then started exploring Modular housing (NOT a mobile or Manufactured ones) and found that they are built more stronger and efficient, mortgage lenders do not differentiate it, public records and MLS lists them as regular houses, personally visited their factories, seen met home owners who has been living in modular homes past 10+ years, almost all module companies offer a turnkey service that takes care of everything from preparing the site to permits to setting up the house. I always respect my critics those who put me on the right path, have inquired many people on reasons not to go modular, then chasing down to the core of it. Almost all of those reasons found to be more of perceptions rather reality.

So following are my questions:

• 1) Are there any points that you like to be added or removed from the initial list above in acquiring a right rental?
• 2) Which of the above five options you suggest/recommend along with pros/cons?
• 3) How to approach City Planning for any of those approvals (hire an Architect or a Contractor?   Any online services that you are aware of? )
• 4) Has anyone done similar projects?  appreciate if you could guide or share your experience.
• 5) Financing options available?  Already in talks with local banks.

Its a big post and appreciate your time reading through and thank you in advance for your responses.