Scrape and build a duplex? Sell? Austin Texas in Opportunity zone

[Donna Pattani]

Not sure what to do, selling would be easiest but don't want to waste an opportunity, if there is one.

Rental house in 78744, close to downtown on .24 acre.

Tenants leaving soon. Living room floor is sagging, pier and bean foundation needs 38k to make the house up to code, there are many other issues also, it's old and weird.

Rent is 1500, I owe 120k on it.

I was thinking of getting a construction loan, scraping it and building a 2000sqft duplex, it's zoned for that and there are no tree issues.

Arv of new build would be around 430k

Construction @ $150sqft = $350k + 120k land = $470k

Maybe I answered my own question, hmmmmm...

[Aaron Gordy]

@Donna Pattani Check your comps. An arv of $430k would make that property the most expensive duplex in that zip code. The highest priced duplex sold for $401k and it was completely remodeled with granite counters, undermounted sinks, new high end flooring, etc. If its me, I would do some repairs and wait to remodel it. If you can remodel it and get close to $400k then why go through the hassle of city permits etc just to try to make a few more bucks. The city permits and the construction process will slow you down for months so in fact you may not even make a few more bucks. It needs to be a big spread, imo to make it worthwhile. The process is not cheap!