Vacant Lot Purchase

[Jamie Parker]

Investment Info:

Other buy & hold investment.

Purchase price: $3,000
Cash invested: $3,000

Vacant Lot

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

The city is changing the zoning in the area. Plan is to purchase multiple vacant lots for future development.

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

Land Bank Property

[Jamie Parker]

@David Mares The short answer is to build and develop the area. I purchased the property from the Shelby County Land bank. Im working out what that would look like in terms of price point. At the current cost to build estimate $150/sqft, It appears a 1500-1700 sqft new construction will need to sale for around 399,9k to make a decent profit. With no comps in the area for new construction and the highest rehab selling for 205k, building enough at the onset, 4-6 new construction homes, may be the only way to start a neighborhood turn.

The city is looking to increase density in the area and add anchor points in near the area to cater to future investment. I attached some visuals to give an ideal of the type of area. 

The city wants to have "Neighborhood Anchors Points" consisting of Mixed-Use and Retail/commercial

Visual of all land bank properties 

The area I will focus in.

A break down of cost to purchase all Land Bank properties on each street. 

How the City intents to rezone for density. Also with plans to reduce industrial "intensity" in and around residential areas. 

Understanding the Product mix. Small (1700 sqft or less) medium (1701 -1999 sqft) and large (2000 sqft or more)

Cost benefit analysis Estimates IF 300+ homes are built over 10 years

Alot of technical information to say that:

- When I start development, i will be going into uncharted territory. 

- New construction will be comped against other new construction 

- Start out with enough comps to justify the price point

- keep the area tight to consolidate the risk vs building one or two in different parts of the same neighborhood.