Small Multi-family new construction

[Chris Allen]

So I am looking at two of pieces of property that I know the seller is open to selling. Its an old house on a 0.56 acre plat that cuts right in the middle of another plat that is about 2.5 acre, both owned by the same person. The house is zoned for "Neighborhood Service", and the larger piece is zoned "General Retail". I talked with the city planner today and he let me know a developer actually just backed out of building a corner store there because the neighbors did not want a retail area there, but when I mentioned splitting the plats and doing maybe like duplexes or something there, he sounded excited and thought that the neighborhood would be on board for something like that. My question is this...

If I were able to tackle this deal, how would you go about financing and structuring a deal like this?

I know there are several exit options available to this property, as long as I get the neighbors and city approval, so any other suggestions on use for this property?

[Sue Hough]

@Chris Allen. What I have done in the past is what Terri stated above; secure the contract on the land with a very long due diligence period to allow you ample opportunity to allow for zoning changes. I would not recommend using a standard MLS contract, you would want to have your attorney draft one specific to this deal. Zoning changes can take months. After zoning is approved you need permits, which requires architectural plans and various land surveys. Do not close on the property until the land is zoned for what you want and you have your plans approved...this is key. The city can tell you everything looks good, but that means nothing. All it takes is one salty neighbor to lay some fertilizer down to muck up the process and stop the development. So, let me repeat, do not close on the land until you have your permits in your hand!!!

Good luck!