From a Flip to a 40 unit townhouse development

[Angie Castro]

Investment Info:

Single-family residence other investment.

Purchase price: $90,000
Cash invested: $120,000

There was a house on a 1.41 acre lot that I was going to flip. I had it under-contract for $90,000 and It needed $105,000 in renovations. All in at $195,000 and I could sell it for $310,000. BUT THEN...I called my builder friends because the seller of my property owned a lot that was right next to mine and he wanted to sell it. It turns out that we could build a 40 unit townhouse development with a value of $10Million. I'm sharing this today because we got the rezoning!

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

I was happy to have found a flip that actually made sense. It was a good price and I was going to make a three figure spread. I had no idea that we could do a development and I was only looking at it like a flip.

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

Off-market with a wholesaler. Once I had my lot we connected with the original seller who also owned the land right next to mine and wanted to sell it. Once we were in negotiations for the development I involved my attorney for guidance.

How did you finance this deal?

I financed this deal with a private money partner. No cash out of pocket.

How did you add value to the deal?

I found the land and put it in front of the right people. Come to find out that in the town where the land is located all you needed is 3 acres for a subdivision. My lot and their lot were exactly three acres.

What was the outcome?

A 40 unit townhouse development in the making. My favorite part is that we got the land for so so so cheap!

Lessons learned? Challenges?

Lessons learned were how to analyze and think developer which is a huge skill. What land could be rezoned and what could not. I learned that it really really matters where the land is located. The city of Gastonia has been insanely helpful in getting our development passed. In bigger cities we would have found a challenge to even get Zoning & Planning on the phone. Let alone a meeting.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Worked with architects, surveyors, builders, agents, and attorneys. I would recommend every single one of my connections. I have been working with the same people for quite some time and loyalty takes you very far.

[Kristi Kandel]

Quote from @Angie Castro:

Investment Info:

Single-family residence other investment.

Purchase price: $90,000
Cash invested: $120,000

There was a house on a 1.41 acre lot that I was going to flip. I had it under-contract for $90,000 and It needed $105,000 in renovations. All in at $195,000 and I could sell it for $310,000. BUT THEN...I called my builder friends because the seller of my property owned a lot that was right next to mine and he wanted to sell it. It turns out that we could build a 40 unit townhouse development with a value of $10Million. I'm sharing this today because we got the rezoning!

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

I was happy to have found a flip that actually made sense. It was a good price and I was going to make a three figure spread. I had no idea that we could do a development and I was only looking at it like a flip.

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

Off-market with a wholesaler. Once I had my lot we connected with the original seller who also owned the land right next to mine and wanted to sell it. Once we were in negotiations for the development I involved my attorney for guidance.

How did you finance this deal?

I financed this deal with a private money partner. No cash out of pocket.

How did you add value to the deal?

I found the land and put it in front of the right people. Come to find out that in the town where the land is located all you needed is 3 acres for a subdivision. My lot and their lot were exactly three acres.

What was the outcome?

A 40 unit townhouse development in the making. My favorite part is that we got the land for so so so cheap!

Lessons learned? Challenges?

Lessons learned were how to analyze and think developer which is a huge skill. What land could be rezoned and what could not. I learned that it really really matters where the land is located. The city of Gastonia has been insanely helpful in getting our development passed. In bigger cities we would have found a challenge to even get Zoning & Planning on the phone. Let alone a meeting.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Worked with architects, surveyors, builders, agents, and attorneys. I would recommend every single one of my connections. I have been working with the same people for quite some time and loyalty takes you very far.

 Very nice work! I've been a developer for 17 years across the country and love hearing stories of the "little guys" winning! We need more of this in every community vs "professional developers with national Tenants".  (also why I'm building a development 101 course and then planning on doing a masterclass after that. The more we can share and normalize HOW to be a developer the more people will realize they can do it too!)  Congratulations on the rezoning success so far and the future success of your permitting & construction!