Dover Duplex Development

[Evan Jones]

Investment Info:

Small multi-family (2-4 units) other investment.

Purchase price: $375,000

With a group of investors we purchased a 1 acre lot in Arvada, CO. While my partners have 30+ years of real estate experience, this was the first subdivision any us had done, and that task fell to me. Ultimately, we demolished a house and 3 garages, subdivided the lot into 7 separate parcels, and built 3 duplexes (6 individual units total) as a spec project. Up until this project, we had only ever built SFR on lots that were already zoned for this construction type. The project is finally complete (timing is another story!) and we are working to sell 2 remaining units. I learned a lot of good lessons during this project that have helped to define, and refine, my path forward. Many lessons learned!

What made you interested in investing in this type of deal?

I have always wanted to learn how to operate larger scale development projects and this seemed to be a good first step after focusing on just single family and individual duplexes being built for sale. My original hope had been to figure out how to manage at a larger scale over a similar or shorter time frame doing less of the work directly.

How did you find this deal and how did you negotiate it?

Zillow, and one of the partners within the group negotiated and purchased the lot for the development.

How did you finance this deal?

Lot purchase was self-funded. First duplex was financed through a local bank construction loan. Duplexes 2 and 3 were self funded.

How did you add value to the deal?

Property subdivision and ground-up residential development.

What was the outcome?

We have accomplished all we set out to do (i.e. subdivide the land and develop it successfully).

Lessons learned? Challenges?

The biggest lesson learned, and the biggest challenges faced, were associated with the partnership. We should have spent more time defining roles, and allowing for those roles to be updated/changed if needed based on the changing needs of the project.