New to Investing - House Tear Down Question

[Paul Haddix]

Howdy BP,

I live in the Overland Park, KS area of Kansas City. We like where we live as it is an inner-ring suburb with walking accessibility to shopping and restaurants. Johnson County where we live has a mix of income levels and housing prices. Our specific neighborhood is one of the more affordable and has seen a high degree of investing and housing turnover in the past 24 months. Currently there are no less than four tear down or in fill projects located within 0.5 miles of our house.

The house that we personally live in was also an in fill house and on our street there have been 2 other in fill houses built in the last year. The house next to ours is very small and set far back on the lot. It is in bad shape and the owner is willing to sell it. I am trying to determine what I can afford to pay for the house and still make a profit on new construction. 

I am sure you can tell, even by the nature of my question, how new I am to this. With that said I also have a lot of connections in the design / building world here and feel like I would have the right partners to make this happen. I also have the cash to make it happen pretty quickly.

All that to say any advice on how to begin evaluating this deal?