Possible Game Changer! Input Needed!

[Account Closed]

Good Day Investors,

In my recent search for my next deal, I've come across a potential Game Changer!  I was originally looking for a flip or wholesale deal.  I found a deal that, on the surface, doesn't appear to have much potential. However, Its in an area that my wife and I are considering moving to, so I decided to give it a deeper look.  After doing my due diligence, the opportunity appears to have enormous potential.  

The Deal:

Currently listed with @ 160 days on market

Historic Bungalow/Cottage/Ranch, Located @ 35 min outside of Atlanta, GA                                          

4/2  1780 sq ft (on tax records)

Needs @ $25-30k to updated/Rehab with same/similar floor plan

Asking Price $240,000

ARV @ $225,000

I know... Terrible deal, right... Not so fast... Here's the Kicker:

The property sits on 9.8 acres.  The listing shows a plan for adding a road and sub dividing into 9 or 10 additional lots.  The area has tons of New Construction subdivisions surrounding it. Recent Comps are ranging from $200k to $310k depending on finishes and amenities!!  The property is zoned R2, which to my understanding is "Rural away from commercial dwellings". 

A little about me:

My experience includes multiple wholesale deals, Partnered on a couple of light flips (silently, not involved in the day to day), and some Air BnB. Needless to say, this project is far beyond my scope and level of experience. I wouldn't feel comfortable tackling it alone.  It is however in the direction I have been wanting and planning take my Real Estate Investing.  If I were to peruse this deal i would be seeking a partner that would be willing to let me learn from them along the way, the ins and outs of completing a project of this magnitude.   

I'd love input from you all... specifically, on things I may be overlooking, questions I should be asking, other city/county/state records and permits I should be researching.  Also, is there anything I should be weary of when seeking out partners for this type of deal, and any input on how it could be structured would be greatly appreciated.

Looking forward to hearing from you all, and TIA!

Best, 

WIll G

[Greg Dickerson]

Originally posted by @Account Closed:

Good Day Investors,

In my recent search for my next deal, I've come across a potential Game Changer!  I was originally looking for a flip or wholesale deal.  I found a deal that, on the surface, doesn't appear to have much potential. However, Its in an area that my wife and I are considering moving to, so I decided to give it a deeper look.  After doing my due diligence, the opportunity appears to have enormous potential.  

The Deal:

Currently listed with @ 160 days on market

Historic Bungalow/Cottage/Ranch, Located @ 35 min outside of Atlanta, GA                                          

4/2  1780 sq ft (on tax records)

Needs @ $25-30k to updated/Rehab with same/similar floor plan

Asking Price $240,000

ARV @ $225,000

I know... Terrible deal, right... Not so fast... Here's the Kicker:

The property sits on 9.8 acres.  The listing shows a plan for adding a road and sub dividing into 9 or 10 additional lots.  The area has tons of New Construction subdivisions surrounding it. Recent Comps are ranging from $200k to $310k depending on finishes and amenities!!  The property is zoned R2, which to my understanding is "Rural away from commercial dwellings". 

A little about me:

My experience includes multiple wholesale deals, Partnered on a couple of light flips (silently, not involved in the day to day), and some Air BnB. Needless to say, this project is far beyond my scope and level of experience. I wouldn't feel comfortable tackling it alone.  It is however in the direction I have been wanting and planning take my Real Estate Investing.  If I were to peruse this deal i would be seeking a partner that would be willing to let me learn from them along the way, the ins and outs of completing a project of this magnitude.   

I'd love input from you all... specifically, on things I may be overlooking, questions I should be asking, other city/county/state records and permits I should be researching.  Also, is there anything I should be weary of when seeking out partners for this type of deal, and any input on how it could be structured would be greatly appreciated.

Looking forward to hearing from you all, and TIA!

Best, 

WIll G

Will - One thing to consider is if there is new construction developing and seling all around the property and its been on the market 160 days with no interest there is likely a good reason. 

Next thing is there is a huge difference between building and selling $200k and $300k houses when it comes to developing land. It can cost you a lot of money to develop lots to build on and then you have to build the houses so there's not as much profit as you may think.  

The first step is to discuss the with the city or county and find out what you can do, what are the steps and costs associated with developing the property. Once you have an understanding of the process and costs form a municipal standpoint you need to get an estimate of the cost to improve the property including streets, utilities etc.  

Once you have an idea of the costs to develop you can work it all backwards to see if there's any margin of profit on developing the lots. Builders can pay 20-25% of the sale price of the house for the land so that will give you an idea of what you could make on the lots. Ideally you want a 30% profit margin on the land and at least 20% on the house if you are buying a lot and building a spec.