Advice for a noobs current situation

[Sean Webb]

Hello fellow REI's, I'm a noob from Houston and I'm looking for any advice or tips on my current situation. My immediate family has two fully paid single family homes in Houston and 1.5 acres of raw land (I believe is on city water and sewer) in Roman Forest, near New Caney, TX. The land is in a nice little community off 59N and is paid off as well. In the past year my mom has been talking about full retirement and how she would rather work on personal projects. After analyzing the situation and realizing potential REI opportunities at hand, I made her a business proposition. The plan I have in mind, since I don't have any big time capital, is to take a heloc or an equity loan out. We can split the raw land up in half and build two different houses to sell. She definitely became interested with the idea to use her properties as a stepping stool to enter the world of REI, especially because she didn't have any plans for any of her properties. I have already looked into a land surveyor and land/tree clearing companies, and also a blueprint sketch architect, but I have not looked into contractors yet. My question is just for some advice on the entire plan. We are considering placing one of the homes under my name to gain multiple heloc opportunities. Again, I am a complete noob so anything is greatly appreciated. If you see any holes in my plan or have any heads up on what I should expect when doing new construction, please tell me! I'd like to know if its not the best idea to start with a new construction job for my first intro into REI. I am all ears!...thanks guys and gals!

[Jeremy Pakalka]

@Sean Webb The first thing I would do is look at the recent sales in that neighborhood and compare them to the size of house or houses you are looking to build. Make sure the comps you look at are very similar to yours so you get a very good idea of the value. I would then find a builder to get you a hard quote to build the house so you can see how much money you can make.

I would also be concerned with the days on market for the neighborhood. You will have significant holding costs during the project so you need to know how fast you can sell at a certain price. I do not know that area very well but sometimes houses can sit for a long time even though it is a new build since it is not in Houston. I would also make sure you can subdivide the land. Some areas will not allow that but I doubt that is an issue for you.