How many homes can i build?

[Gene H.]

Hello - I'm a newbie when it comes to real estate development but wanting to learn. Have an interesting opportunity that i'd apprecaite input/views on. Lot is in a suburb, south of Seattle.

Combined site for sale is ~3.6 acres, retangular shaped. Fairly flat with the exception of a small portion of the lot (back end). The site is currently zoned public/quasi-public. A portion of the lot was used as a school bus lot and about 2.8 acres of the lot used as a soccer field.

The zoning around the two parcels is zoned residential w/ majority of them 7,200 sq ft lots. I think we'd be able to construct ~2,000 sq ft homes.

The price for the lot $1.3 million. New homes in the area can fetch around $200-$250 per square foot.

What i'd like input on for this type of development is:

1) Whether undertaking this project would be financially feasible if rezoning to residential (w/ 7,200 sq ft lots) were possible?

-I'd specifically like to get an estimate/ball park figure re how many homes I would be able to construct, taking into account the roads/communal areas that would need to be in place for the homes.

2) The process and key milestones to get this developed from submitting an LOI/offer for the land all the way to construction/selling the homes

3) Any good resources on the topic?

Thank you. Any input would be much apprecaited!

[Mario P.]

Assuming you can rezone the land to residential, you can take a look at the surrounding residential developments to get a sense of the density you can achieve on your site (while taking into consideration the potentially undevelopable areas of your site). Speaking with the town planning department will help.

Once you get a good idea of the number of units you can develop, you can estimate their potential sales revenue, back out hard and soft construction costs, back out an acceptable profit, and that will give you and estimate of the site's max value.