Townhouse Development

Townhouse Development

Bellingham, WA · Member since 2014 · 14 posts · 2 votes

I originally joined BP to learn how to make my property more attractive to potential buyers/developers and in a Pygmalion like twist, I am now contemplating developing it myself. 

The city has turned surprisingly builder friendly, the land is paid for, I will have a large cash reserve to pay for some of the upfront soft costs.  This should make the land more attractive to lenders when it comes time to borrow the big bucks.  In theory it shouldn't be too difficult to build, the land is flat, new housing development next door, utilities are at the road (yup, I know it's expensive to drag it out). Big demand for rentals.

Negatives, I am a newbie, it's in western WA, so it won't be cheap or easy (even with the city's change), all the issues that come with new construction, which is exasperated by the size of the project. 

Would like any thoughts or ideas, all criticism is happily welcomed. 

Some questions, I am getting a bid done for some site work and I have talked to a architect/GC.  I will continue to talk to all manners of people in the business, but is there anyone I should be really seeking out, other then other builders to get their prospective? I have talked to some very friendly and helpful city workers. 

Sorry for the long post, but if it matters: zoned mixed use/townhouse, when it was zoned sfr could get 60+ lots. The land is located in one of the fastest growing cities for the state. 

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Real Estate Agent · Tampa, FL · Member since 2015 · 467 posts · 57 votes
11y

Find a local medium sized construction company, someone who will JV it with you.

You do NOT need an 'architect' at this point. So many off market pieces of land we pick up a seller paid tens of thousands for an architect to write up unbuildable/sellable plans. 

You need an experienced builder who isn't too big to want to write you out of the deal by just buying the low. If you were in Tampa I could help you out more specifically.

Your best bet would be to decide whether the land is worth more as SFH or TH. Get the zoning and platting done and then resell the land at that point. Offer owner financing or JV with the listing. If you really want to get more out of it you can run all utilities/etc and develop the land up to construction, that will add a lot of headache (especially if you haven't done it before) but will get you a very good RoI.

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  • Real Estate Agent · Tampa, FL · Member since 2015 · 467 posts · 57 votes
    11y

    Find a local medium sized construction company, someone who will JV it with you.

    You do NOT need an 'architect' at this point. So many off market pieces of land we pick up a seller paid tens of thousands for an architect to write up unbuildable/sellable plans. 

    You need an experienced builder who isn't too big to want to write you out of the deal by just buying the low. If you were in Tampa I could help you out more specifically.

    Your best bet would be to decide whether the land is worth more as SFH or TH. Get the zoning and platting done and then resell the land at that point. Offer owner financing or JV with the listing. If you really want to get more out of it you can run all utilities/etc and develop the land up to construction, that will add a lot of headache (especially if you haven't done it before) but will get you a very good RoI.

  • Bellingham, WA · Member since 2014 · 14 posts · 2 votes
    11y

    Thanks for that great post, Devon!

    Yeah, I wasn't too sure about the architect route, thanks for letting me know about my options.  

    Owner financing would also be great, from a tax point of view. That property has appreciated greatly and the capital gains will be gnarly. JV would also be ideal, and I have approached some builders with that offer, but business is booming and so far no bites.

    I won't bore you with the details, but TH is definitely the way to go. 

    One of the things the city is allowing is to defer up to half of permit and impact fees till final inspection, so at least if I will save some up front money. 

    Thanks again!

  • Real Estate Agent · Tampa, FL · Member since 2015 · 467 posts · 57 votes
    11y

    Go back to the people who haven't bitten them and ask 'why not?' If you haven't allready.

  • Bellingham, WA · Member since 2014 · 14 posts · 2 votes
    11y

    Go idea, I will do some follow ups. 

    Thanks again!

  • Investor · Member since 2021 · 203 posts · 124 votes
    4y

    @Mel Locke

    Hi Mel, very similar situation for me. I’m curious how this turned out for you?

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