Scrape and Build... How do we do this?

[Julie Hill]

We own two homes in Denver in an urban neighborhood, close to downtown. The neighborhood is up and coming and many of the homes (built in the early 20th century) are being scraped to build 3 story duplexes, townhomes etc. due to the zoning. Right now, our properties are SFR's but we would definitely make more $ if we were able to scrape and build and either rent or sell the units. However we don't know how we could possibly fund this AND have no idea where to start. At this point, we just want to put them on the market so we could pay down some of our other properties or do a 1031 exchange. I just thought I would put this here in case there is a strategy to developing that we don't know about. We are completely tapped out as far as cash goes to be able to put down a ton of $ upfront to be able to do this. Here is the zoning of the properties: "U-RH-3A is a multi unit district that allows up to a two and a half story rowhouse building form.
Apartments are allowed up to three stories, on certain corner lots. It also allows the urban
house, detached accessory dwelling unit, duplex, and tandem house building forms."

[Rafael Castro]

Quote from @Julie Hill:

We own two homes in Denver in an urban neighborhood, close to downtown. The neighborhood is up and coming and many of the homes (built in the early 20th century) are being scraped to build 3 story duplexes, townhomes etc. due to the zoning. Right now, our properties are SFR's but we would definitely make more $ if we were able to scrape and build and either rent or sell the units. However we don't know how we could possibly fund this AND have no idea where to start. At this point, we just want to put them on the market so we could pay down some of our other properties or do a 1031 exchange. I just thought I would put this here in case there is a strategy to developing that we don't know about. We are completely tapped out as far as cash goes to be able to put down a ton of $ upfront to be able to do this. Here is the zoning of the properties: "U-RH-3A is a multi unit district that allows up to a two and a half story rowhouse building form.
Apartments are allowed up to three stories, on certain corner lots. It also allows the urban
house, detached accessory dwelling unit, duplex, and tandem house building forms."

I’ve done a few of these scrape and build deals in Seattle WA where the multi family zoning laws allow for town homes /apartments. 

If you list it here’s what will happen (if your props are buildable) - you’ll get offers from developers. Some will want a discounted price to close on the property quickly. Other developers will ask you to do a year long escrow so they can work on permits and then close on the deal when they can start building. 

maybe partner with a developer? Tell them you’ll let them build on your lots and then split the $ when they sell units. 

let me know if you have other questions, I’m quite familiar with these kinds of deals.