Multi-family New Construction BRRRR?

[Chidiebere Iwuoha Jr]

Hey guys, I’m looking to help my family develop a piece of land we’ve had for sale for a couple years and hasn’t sold in Anchorage, Alaska. 

Land value is around 9,000sqft. Worth around $76,000. 

We will have around a $250k heloc if needed, $100k in cash, and pretty much own the land outright ($76k in equity). I have a strong income and should be able to qualify for a construction loan as well. 

Issues currently:

-The piece of land doesn’t have utilities (so we’d need to bring in utilities / put in well and septic).

-I don’t know much about new construction, only have experience with my own 4plex I got a couple years ago. 

1. where should I start?

2. Are there other options I could consider? What would be the best investment move considering the assets we have available?

Thanks in advance! 

[Ben Firstenberg]

I think the best place to start is with finding a GC who can get this work done for you. Get a quote for the construction and see how it compares to completed value.

Owning the land helps a lot. Some lenders (emphasis on "some") will let that be your equity component for construction loans. Since land costs are often one of the biggest line items in a construction budget. 

Depending on the location, you could possibly create some value by developing the land a little bit (bringing in utilities, maybe moving earth and leveling if necessary, even rezoning if you think it could work as a 2-4+ unit) and then selling the land as a "development opportunity". Given it's a smaller plot of land, you could maybe also create value but purchasing adjacent plots and aggregating into one larger piece of land?

Hope this helps!