Steps to Acquire a Tear Down

[Rich Hupper]

Hello

Over the past year I have been marketing, and door knocking on off market properties in my area. The two I successfully put under contract were tear downs. The deals have since fallen apart due to my lack of experience. With both deals I had the funds to close but with both I made the closing subject to obtaining a building permit.

I am a novice with this transaction and would like to know what builders do to acquire tear downs. 

Lets say for example a lot does not meet the current zoning bylaw for that zoning district. Would a buyer builder spend money obtaining a variance prior to closing ( with no guarantee they will get a variance ) or would the seller typically go get the variance? Is it even possible for a perspective purchaser to go before the ZBA for a variance on a property they do not own yet?  Or would the buyer builder buy it without the building permit and gamble obtaining it at a later date once they have a variance?

I think the reason both my deals fell apart was because I did not want to close until I got the building permit and both deals required a variance to build a new home. 

Any builders on this forum I could speak to about their strategy.

Thank you

[J Scott]

Originally posted by :

The big question for me is do builder buyers spend money on properties they don't actually own yet?

I can't speak for others, but we'll generally want to be pretty certain we can build what we plan to build before we complete the purchase.  That said, with some experience, you should have a reasonable idea of whether you can execute your strategy long before you have building permits. 

My recommendation is to find someone in your area who has experience building, and offer to give them a percentage of your first deal in exchange for their support/help during the process.