Building 9 or 10 Spec Houses in an Existing Neighborhood

[Joshua Stewart]

I live in a suburb of Charlotte where there is a lot of re-development happening in the downtown area. They are just about re-building the entire downtown core, including a new minor league baseball stadium that is under construction.

A lot of the homes around this area are 100 year old (+/-) mill houses from an old factory that no longer exists. In one neighborhood there are 9 vacant lots, one of which could be divided into two lots based on zoning requirements. 

As a Designer and someone who lives in a near-by neighborhood, I want to be a part of our town's re-development and have identified these vacant lots as somewhere I would like to find investors to work with to build new homes sprinkled in to this particular neighborhood, which is right on the edge of downtown.

While the real estate prices for existing homes in this area aren't great, new construction prices around town for other developments are running $175,000-$250,000. Someone has done something similar to what I want to do - building new mixed into an existing neighborhood - with five homes all side-by-side that average over $100,000 more than the existing homes in that area.

Some of my questions are:

• Is there reason to be concerned that existing homes in the neighborhood have low values because of their age and condition, keeping in mind I want to build 9 or 10 and raise the level of the neighborhood?
• With the location on the edge of an improving and re-developing downtown, does that increase the value of these proposed new homes despite the existing ones?
• I have considered designing all 9 or 10 homes and "pre-selling" based off the renderings and floor plans I design, to at least sell a couple to prove the idea before we break ground.
• I want to work directly with private investors, not traditional financial institutions. What is the best way to go about that?

Any other thoughts or ideas are welcome.

Thank you in advance for your feedback!