Raw Land, what to build?

Question

I bought a beautiful 1.3 acre lot out in the county near a river for 175k.  It has a huge septic already in, a good well and an existing home from the early 1920's that I am planning on tearing down.  The area has million dollar homes right down the street on some 5 acre lots so I think there quite a bit of potential for a custom build.

My question is, what to build?  I have considered building a big beautiful custom home and have interviewed builders but that requires a lot of cash down, I was quoted $184 a sq ft based on the building plans, which put me at around 460k for the build, which brings me to around 635k all in.  Based on the lot size and lack of comparable properties in the area its been a little hard to project a list price but I would like to clear a good chunk of money for my efforts.  And selling in that 700-900 range properties tend to sit a bit longer because there are less buyers in that price range.

I have also considered building a spec home at a considerably lower price, and I am also toying with the idea of putting a manufactured home on it for around 100k and getting a quick return. Would love your thoughts Bigger Pockets!

Sean McDonnell · Answer

You should build a tiny home village and rent them out as vacation rentals.

Account Closed · Answer

My first thoughts: What is the age of the septic system? By huge, what does that mean? In my state, septic systems are typically sized by number of bedrooms it serves. If it was put in before 1996, chances are that it will need to be replaced at minimum or at least upgraded when you add on to existing or build a new building on the property. What is the zoning? ? Can you subdivide it? Is there enough road frontage to subdivide? Check with the county for min lot size. Does your build price include demo of the existing? In your manufactured home scenario, does it include demo? You can't just fix up the old house? I don't know, this sounds really dicey. I probably wouldn't be into a parcel for that kind of cash without having a plan. I would try to get out that as soon as I could and get into something with some more realistic meat on the bone. Rural undeveloped is the very hardest to appraise. Good luck and let us know what you decide to do!

Andy Bauman · Answer

Another possibility may be a modular home.  I've heard you can build really nice homes with it quick and for less capital.  Once put together on the foundation there is no difference than a traditional stick built home.  Another idea, try to find somebody that wants to build custom so you have an end buyer.  Then you can build what they want and have a buyer already lined up.

Raw Land, what to build?

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