Tear down and build

[Matt Geerts]

I'm looking at a big lot in a good location with a garbage house that won't sell at a low price. The lot is R3 zoned (up to 4-plex) in a town with rock bottom 2 bed vacancy rates.

If a guy like me wants to build a side-by 4-plex here, what do I need to do?

1) Get money - I imagine that even if I get private investors and my own cash together that the bank won't loan on ARV for a total tear-down and re-build. Is that fair to say? Should I just scrape money together for each phase and pay off the loans when it is all done and I can refi with a bank?

2) Tear down - this part is easy. Either a) the builder will do it, or b) I have a lot of fun with a back-hoe and a dump trunk (really, I have a friend that drives a back-hoe for work, this may be an option)

3) City? Do I just need a building permit? There's no zone change... is this just a simple thing?

4) Build - Do I just hit up the companies that I see putting up subdivisions in my area for a price? I've seen some companies with a portfolio of multi-plexes.

5) refi - I can't see this being too difficult, and I fully expect that I'd have spent less than 80% ARV to get here, so I'm all-cash-out and landlording a brand new fourplex.

Okay, now tear my plan to shreds for me.

Thanks!

keywords: London Ontario Canada Development multi-family