VACANT LOT with WETLANDS

[Jennifer Lee]

HI BP

It's been a long time since I have posted.  I have a NEW CONSTRUCTION, VACANT LOT buying question:

My experience in Real Estate since I found BP has exponentially grown.  And now I am charting in uncharted territories (at least for me).

I found a vacant lot, in a good SU-1 Zone (Special Use) in a commercial center of a growing town.

The lot, caught my attention, because it was listed at a fraction of the price of "regular" lot.

So immediately, I thought SOMETHING MUST BE WRONG with it.  All the lots surrounding it has been developed (USPS, big box stores, Hotels etc)

We did a driveby.  The lot is relatively flat and it slopes to the back.  We found that there is a CREEK that runs by the back of  property.  I have access to RENDERINGS that the seller provided, approx. 2/3 of the 2.5 acres is designated WETLANDS.  The renderings also provided possible uses; medical, office, retail and restaurant positioning 

I was looking for something "small", the proposed usages are:

 * 6500 sqft medical/retail office with 40- parking was what I am looking to do.  

* 13,000 sqft 2 stories (10 unit apt or 8 unit office ). 40+/- parking ( I already own 2 of these types) or 

*  3500 sqft restaurant with more parking (I already have a restaurant unit, so don't want to go there)

I looked at the pricing, the lot is 1/3 of market price, I assume b.c 1/3 is buildable 

1. HOW DO I DO DUE DILIGENCE?

- I looked up all the zoning and futuring planning plots and map, my goal is inline with what the county wants. I haven't talked to the county yet, didn't want to rock the boat til I am sure.

-I have researched new construction: $70-150/sqft depending if it's medical or office

-Rental in area is $15-25/SFT,  avg is $18/SFT

-I talked to my finance guy, and if my husband was to use the medical office, financing would be in a better position (this is unknown right now, we toyed with idea)

2. WETLAND: This is what scares me as a "newbie", should I move on?  

-my experience with commercial is I have bought several existing building and have dealt with bits and pieces of commercial real estate. Dealing with county to do improvements, leasing business use issues. and landlording/maintenance.  I have my vendors and players in place.

-NEW construction experience: building our live in flip with builder, and helping client with new construction buy side...that I think doesn't really count though.

3. WHAT ARE THE COST ASSOCIATED in BUILDING A 10 UNIT APARTMENT FROM SCRATCH?

- I have done enough rehab and worked with my GC long enough to know what an a la carte cost of bathroom, kitchen, roof etc are.  I was surprised my number was off by 50% (hahahaha)

- I know there has to be some pre construction cost, architect, engineering etc...

These are my major questions right now.  I have more, but if I can't get over this hump, I might pass. 

EXIT PLAN:

1. BUY/HOLD: Land lease, or build to suit when tenant comes along

2. BUILD MEDICAL/APT BUILDING and RENT  

[Tim Evans]

Jennifer, I spent two years permitting a house and pier in 100-foot and 1000-foot buffers of tidal wetlands of the Chesapeake Bay in Maryland. The house is built, and I now rent it to tenants.

I would not delay in talking to the county. They are helpful, as long as you ask specific questions (bring the renderings and maybe sketch proposed structures). I would also talk to a surveyor, as the renderings probably need additional details, and he can give you preliminary advice on what will pass or not. You have connections, and a surveyor would be selling himself at the same time as advising you.

We did extra structural engineering on the footer. Also, we planted trees and bushes to compensate, which you might have to decide will be on-site or the county might let you choose another site.

The idea of retail and residential sounds great; right now I only have single-family.