What to do with vacant lots in Orlando Fla

[Carrie Maultsby-Lute]

Hello BP,

I have two vacant lots that I inherited (4916 and 4924 W. Jackson Street in Orlando Fla, 32811) and would like to either sell or develop and would love advice on how to make use of this land.

The lots are around 26k sq ft all combined and unfortunately are landlocked so some type of easement would be needed. It's zoned as a multi-family (3 dwellings per lot for a total of 6 units), even though the area primarily consists of single families. The area is around a C from what I recall but seems pretty quiet. The schools in the area rate 10 and 9's which is great so families could be the target audience. 

I am wondering if any investors/realtors in that area could advise about options. I would love to make a buy and hold work as it's been in the family for generations but also open to a sale. I have thought of the following scenarios so far:

1. tiny homes or prefab developed

2. renting the land to a potential investor (e.g., org for community garden)

3. selling the land (what are ideas for doing this... land doesn't seem to be first choice for what realtors want to sell)

I live in the Bay Area so have to keep this in mind as I explore options.

Thanks!!!

[Lee Ripma]

Hi @Carrie Maultsby-Lute,

Good problem to have! So I just did a little research for you. If we look at only this zip code there are 92 total homes that have sold in the last 3 months or are listed on the MLS. There is only one MF, so I threw it out, you're in a SFH market. The average sold price per sf is $73.84 (n=47) and the average list price per sf is $120.16 (n=44). Gotta give it to them for aiming high! This is fairly crude math but it tells you that if you built 6 single family homes that were all the average sf of the sold homes (1305 sf) then you could sell those homes for 6 x 1305 x $73.84=$578,167. But you'd probably want to build more desirable 2500 sf homes so then you could sell those homes for 6 x 2500 x $73.84=$1,107,600. I could further dial in those numbers by looking at the homes that are closer to what you would build and their prices (you're probably looking at a slightly higher price per square foot). So now all you have to do is figure out what it will cost you to build those houses, get the easement, and pay for all the soft costs of land development. If I were you I would build these out as rentals and then do a cash-out refi so that I could keep them in the family! So you're looking at cashing out 75% LTV. So $830,700 all in is your break-even, anything less on costs on your end is profit.

Now obviously my math is pretty crude, but you get the point. Prefab usually only makes sense when construction costs are very high, because "stick-built" is often cheaper. My guess is that you're in a stick built is cheaper area but you could do more research on this. You could see if there are pre-fabs that are similar to what are in the area for under $50/sf. 

Also, I think your flexibility with holding it in a creative way is good, because perhaps holding on to this land while developing some of it makes the most sense. 

I'm happy to send you my quick and dirty analysis spreadsheet, just PM me. 

Keep us posted on what you decide to do!