New Construction Infill Development with Little Capital
Hey y’all!
We own a piece of land in an up-and-coming urban neighborhood. It is zoned higher density, and we've seen some cool SPUD's get approved and built here the past year. Ideally, we would like to split the lot into two parcels, and build an SFR on each one, hoping to avoid any HOA or townhome situation.
Our goal is to be able to build both houses without having to take on any equity partners. We’d like to live in one of the homes as well. Our initial thoughts are to draw up architectural plans, get the lot split approved, and list the lots for sale with plans. We could sell one and use funds from that to assist with building the other home?
Does anyone have experience with small infill development and want to pitch in some advice?
thanks!
Most Popular Reply
@Ryan Kennedy I am not sure that architectural plans provide any value to future land owners. Its highly unlikely that someone would want to build what you design.
If you intend to split the lot, and its allowed, I would start on that first. It can be a lengthy process.
Since you own the land, you should be able to use the value of the land as the part of or all of the required capital needed to obtain a construction loan (typically 20-25% of total costs). If you use this first build as your primary, you may be able to significantly reduce your required capital. Once you finish the first and occupy it, you could use the land plus the equity to build the second spec house and sell it, again using a construction loan.