Subdividing Lots

[Justin Cooke]

I recently purchased/repositioned two under-performing fourplexes on side-by-side lots roughly 0.5 acres each; total 1 acre.  Each lot is roughly 102 ft wide and 200 ft deep. Both are zoned MF-29, which for my county zoning code means up to 29 multifamily units per acre.  I've discussed with city planning department and due to parking and setback requirements it is probably more likely that I could add an additional 8 - 12 units if desired.

I purchased the properties with a 3-year renovation/bridge loan.  I still have a couple more secondary market mortgages available before I hit my ten limit.  I know secondary market will not allow anything above fourplex per lot/mortgage, and I can't find anything close to sub 5% fixed rate 30 year note for any in-house loan locally.  So, I'm thinking of subdividing the back half of both lots into either one or two lots where I could at some point in the future build a 10 or 12 plex, 2 or 3 more fourplexes, etc.  Then, refinance the two individual fourplexes into two secondary market mortgages.

I've never developed/subdivided anything, so I don't know what I don't know!  Is this the right way to look at this?  If so, how do you go about subdividing the lots?