24 Unit Development Opportunity

[Stewart Sears]

Here are the details; 

Current existing property (Details below) on lot zoned for R24 - King County, Wa - 

Beds:5 Baths:2 SqFt:2,140 Lot Size:7,200

Tear down the current home and build condos up?!

My question is, and i know this is a big one. Where do you even start with a project of this size? Does anyone have any experience with a project like this that would potentially want to partner?

Please save all "You may want to consider starting with something smaller" advice. Although I appreciate your concern, i'm really here for some tips on how to move forward 😊

Thanks BP community! 

[Canesha Edwards]

@Stewart Sears

Stewart- I’m in the same boat. I’m under contract for a small infill lot. The plan is to tear down the existing home a build 5-6 townhomes.

Here’s my advice from what I’m learning. FYI- this is my first ground-up project as well.

Tied up the land but make closing contingent upon receiving all development entitlements. Never close on a development property with out all your entitlements.

My first question to you is have you conducted a market analysis to determine what products will fair well in the market? I suggest calling local property managers and see what properties renters are requesting.

Next- Do you have a survey of the property? Most architects/ engineers will ask for this up front. So, if you don’t have a survey - get one.

You also will want to have a feasibility study done by your engineer/architect. I recommend using someone local. You want to choose a firm that has experience dealing with the planning and zoning department. The feasibility study will give you insight into what can be built and around what cost.

The goal is to build something that will get approved and not require a number of iterations, while also staying on budget.

Some cities/counties will post will current approved projects in the GIS maps with draft site plans. I would make a list of the companies who worked on the approved plans as a way to identify good potential architects/engineers.

I also recommend calling the planning/zoning department and speaking to someone about the property. Ask probing questions about the property zoning. See if there are any zoning changes in the pipeline. Determine what’s the process for new construction. What applications will need to be submitted, deadline for submission, etc.

Also, given the uncertainty of the market, construction loans might be hard to come by. If the project cost is under $5Million agency debt is pretty much off the table. For smaller deals local community banks will be your best bet. I would get the financing conversation started early.

I hope this helps. Feel free to PM me with any additional questions. I’ll help wherever I can.

Happy Investing!

Best,

Canesha