Wholesale deal with property that needs to be torn down?

Question

What would be the calculation or process for making an offer on a lot with a house that needs to be torn down?  My end goal would be to wholesale this lot?.

Michaela G. · Answer

Another thing to do is drive around the area and see if there's recent construction. Then find out who those builders are and what they paid for the land. You might be able to wholesale the lot to them without doing anything

AJ Hoffmann · Answer

Thanks for the help guys.  Think I may have to offer close to nothing considering the property value and demo.  I'll throw my offer out there and see if the owner will consider it.

Stephen Masek · Answer

Also, make sure the demolition estimates include asbestos & lead abatement.  To have good estimates, you will need a consultant to perform a  survey for both.  The cost should be between $1,000 and $1,500.

S. ONeill · Answer

Thanks for the Help.  Michaela currently zoned R3 with SFH next door and across and all down the street.  I've been looking at the process one must follow.  Notify neighbors. hold public meetings, going before boards.  It seems to be a long process.  :) plus the cost that comes with it.

Joel The property is located within city limits.  I've been on my county assessor's website looking at the parcel.  But I cant seem to find anything on future land use yet.  I contact an RE attorney that specializes in zoning  Thursday.  And my first question for them will be future land uses on this parcel.   Thanks for that TIP. :)

I'm not going to pull the trigger on the property until I understand exactly what I need to do.  Looks promising tho :)

Thank You.    Anymore advice would be much helpful  and I didn't mean to hi jack you're post Alex

Joel Owens · Answer

Oniell is your property in the county only or in city limits??

If city go to planning and zoning for a copy of the current land use map and future land use map.

Current is what things are today and future goes out typically 15 to 25 years. You can see from the future map and your land what type of zoning they want for your parcel going forward even if it is different from what your property is zoned for now.

This is key because if you trying for zoning that does not conform to the county or cities plans you will have a huge uphill battle and expenses and you might lose time and money.

The land use maps might be online in .pdf format for free if your city or county seat is large enough and has an online presence.

Michaela G. · Answer

What's your present zoning? Those multiplexes might have been built before current zoning. Is the rest of the street SFH? If so, they will have a say, whether you can rezone or not.

Not trying to scare you, just making you aware to not make the deal contingent on re-zoning being possible, as you'd be in trouble if that didn't go through. So, as long as it's a good deal even if you have to deal with current zoning laws then you're in good shape

S. ONeill · Answer

Great advice Joel and Michaela.  I never considered Issues that are grandfathered in. I'm curious in following this thread.  I am facing a similar issue with a property.  Built in 49 but basically four walls and a roof.  The plus is the large lot size.  I was thinking of demolition and then possible rezoning.  Theirs an 40 unit complex next door and a 20 unit single story complex four lots down.  But looking more at a possible duplex, fourplex.    Has any investor did something like this?

Michaela G. · Answer

You want to make sure that there aren't unusual circumstances with the property that have been grandfathered in and which might disappear, once you tear down the existing house:

House built over major sewer line. Built too close to a creek. Doesn't fit today's setbacks. Is your road frontage big enough to fit lot requirements in that neighborhood? Etc

Any historical designations in the neighborhood, which might keep you from tearing down and will force you to rehab to special historic requirements?

Joel Owens · Answer

If the lot is somewhat flat and access is easy from the road demo can be minimal. If the property has asbestos and other issues and property is in a difficult location the costs can go up.

Small houses I have seen being knocked down and cleared for 8k to 10k.

Joel Owens · Answer

You take a demolition estimate of what it will cost to demo the house and haul away.

Then you determine the lots highest and best use and figure out what that is worth. Then you figure what spread you need to buy it at minus demo and haul costs to resell as a lot for your purchase price.