Need advice on old house on double lot.

[Max Shepherdson]

Hi guys,

Just weighing up options to see what the most profitable one could be..

I have a seller who has an old character house 2/1 with about 1450 sqft divided into 2 levels, he wants to sell in August as in the summer he has family coming over to stay.

His lot is large enough to be sub divided and both houses either side have done so about 5-10yrs ago.

Im also looking to move out of my residence with my partner into a house.

Asking price is $550 - This is an off market deal and he would like to sell to me.

Assessed price of 2 lots like the ones next door are $570k. So im getting $20k discount and the house for free which is assessed at $75k.

The area is up and coming and there are a few modern properties popping up on sub dividable lots.

The market is very hot, if he were to sell using a realtor id say he would easily get $600k.

I would like to lock in the purchase now and potentially he could rent it back from me so he didnt have to move and i get a property at a great price as by august the market would have gone up even more and he might start chatting to realtors...

So the options i have been thinking of are;

Buy and live in current house, and hold for a few yrs (land value went up $75k last year and will be continuing at that pace for the next 2 yrs at least)

Buy, live in house, complete the subdivision for about $45k and sell off the lot for about $300k

What other options could I look into?

Not big margins and high up front costs on building 2 new homes on the new SD.

Let me know what you guys think as id love your imput!

Thanks again BP!