Newbie needing direction on an empty lot

[Adam Nafaa]

Hello BP community!

I am currently a law student located in Houston, TX. I have been following BP for a while, and have not done anything real estate oriented due to a lack of time, and a lack of capital. Recently I have had a deal come my way, that I feel that I must act on, but I am unsure how to go about it. I have a 6,000 sq ft. lot located in a prime area within minutes of downtown, and very close to Rice University. My first thought was to build a small multi-family, I was going to bring some friends into the deal to ad a network for fundraising, etc, and or potentially get plans in order, and find someone to sign to the loan, and give a down payment for an equity stake.

I am young with very little capital and am in need of some advice to either affirm my beliefs or point me in a different direction. What would you all do in this situation? Is this too much for my first real deal? Thank you.

[Lee Hampton]

First, make sure the lot can be developed for multi-family. People misunderstand the statement “Houston has no zoning”. While that is technically true, there are several ordinances enacted in Houston in the last seven years the act as de facto zoning, not to mention deed restrictions. Small multifamily is particularly challenging to navigate. The multifamily you see near Rice U. was built long ago and would not be permissible by COH under current rules. You can’t just recreate what you see around the lot.

With 6000 sq ft lot, the max number of units possible is three (3), and that is just based on the density rule which is a max 27 units/acre, prorated that puts you at a max of three. That’s just for starters, not even considering other ordinances, .e.g., minimum parking requirements. Also, Check deed restrictions to ensure multifamily is allowed

If you have not bought the property, get in under contract with a 15 day option, then bring in someone with knowledge to advise you. Getting it under contract ensures you and only you can close the deal. Then get a sense for the real “possibilities” without the worry of someone undercutting you.