Surprise development opportunity!

[Matt Ridenour]

Hello Bigger Pockets stratosphere!

A quick question for you all. I bought a small piece of land about 5 years ago to accompany a rental house that I thought I might sell as a single family dwelling at some point.  The land creates the perfect back yard for my house and was deemed not buildable by the city, which made it very cheap to buy.  ($4,000). 

Now all of the sudden the zoning has changed and I can build up to 4 units on the property as town homes or apartment units. Score! 

My market is Ann Arbor/Ypsilanti Michigan, which is a smaller market, but high value with UM ruling the economy.  This land is in a small but up and coming hipster market called Depot Town in Ypsilanti.  Many Ann Arborites are scooping up houses in Ypsi because the prices over there are off the charts.

What I'm asking is for advice.  I've never developed before, only brrrr.  Where to get started honing in on the best bang for my buck on this kind of project?  Architect?  Local developer?  Hmmmm.  Any thoughts would be appreciated!

[Eric Teran]

@Matt Ridenour I recommend you start with an Architect. Not because I am one but this is what we do. Think of the Architect like the quarterback of the team. You will need lots of players but the Architects coordinates them.

If you are not 100% sure what can be built you can hire an Architect to perform a feasibility study. You can also do this yourself if you have time and don’t mind asking the city departments what is allowed to be built.

For example, even though you are allowed 4 units you may need to meet other requirements such as lot occupancy, setbacks, FAR, green area ratio, storm water management, easements, and so on. Either you or an Architect can perform this.

Once you know what may be built then you may hire the Architect (it might be a different one) to design a plan and do all the coordination.

You will most likely need the following consultants; structural engineer, MEP engineer, and civil engineer. There are many more but you may not need them in your jurisdiction.

One last thing, when building a new structure the more information you have on the plans the more precise bids you will obtain. You will save money in construction cost if you pay more upfront during the design phase.

Good luck and feel free to ask follow up questions.