All Forum Posts by: David Lukas

That makes total sense. Thanks again for all of this!

After some subsequent conversations, it's sounding like our block might end up being spared from multi-lot scraping + max density town homes. Our block has slightly larger and more fixed-up homes than the adjacent block where the multi-lot deal is happening. Additionally, the town home market has softened somewhat since the deal in the next block was priced, more than a year ago. So it may turn out that a developer's preferred strategy is to keep the existing homes, subdivide, and build units in back, which in turn would significantly diminish any economies to be realized from buying multiple lots together. We'll see what happens though.

@Brian Hughes, holy cow, thanks very much for typing that all up--that is incredibly helpful insight! I will have to spend some time to digest that. A couple of follow-up questions if you don't mind:

1. re: the long close - did you ever propose or discuss any sort of indexing of the acquisition price to insulate you from market/reinvestment risk? I have no problem in principle with a long close (I know multi-lot deals can easily reach 18 months or more), but I don't feel like bearing the risk that the market rises 15% between signing and close, and now I've lost purchasing power and can't buy something commensurate.
2. "Try to avoid being the last one to sell out" - I'm curious, what is your specific rationale there? Is that a market timing consideration, or loss of bargaining leverage? One one hand, once I'm surrounded by developments, my BATNA has pretty clearly deteriorated, unless I'm willing to go full-Edith Macefield. On the other hand, as long as the market is there, in theory I should be able to instigate a competitive bidding process between developers at any point in the future, right?

So, we bought our dream home in north Ballard (Whittier Heights) in 2014. However, we were upzoned to LR1 last year, into the Crown Hill Urban Village, along with the adjacent block. Our area of Whittier Heights predominantly has lots around ~6,500sf, which is among the largest you tend to see in Ballard. However, the houses, for the most part, are large and fixed-up, so I did not expect that developers could afford to entice many of these folks to sell.

That, it turns out, was naive. We just learned that 6 houses on the adjacent block are in the process of being sold to a developer, who will put town homes (37 units total) on those 6 lots. The lots sold for $170/sf of lot area. Now many of the families on our block (including us) are considering pursuing a similar deal, mainly in order to avoid being surrounded by 30ft-high HardiePanel boxes 5ft from their property lines.

As we explore this possibility, some of the questions I have are:

1) How much of a premium can I really expect from a package deal vs. selling individually? Particularly given that the package deal means a longer close, and then likely competing for a new home in this same neighborhood with some of my current neighbors.

2) If we hold off on selling for a couple years until the nearby development actually starts to impact our quality of life, how (if at all) does that shift our bargaining leverage? Is there a sweet spot of some kind whereby we want to sell while others are selling, after which our lots somehow becomes less valuable relative to the market? Or would we be better off not throwing in alongside the sudden burst of supply on our street?

3) How can I find the most active multifamily developers in my area? I can find a thousand websites, but many of them seem to be inactive.

4) Any other advice on strategies for pitting developers against one another to get the highest price?

Thanks in advance!