Hi everyone, I am looking for some recommendations on the risks/rewards of a potential deal as well as how to mitigate those risks with the appropriate financing.
I have a potential lead to acquire a teardown house located on a splittable lot in Southern California. This specific neighborhood is an exceptionally expensive area, but could potentially yield a massive ROI if this deal is done correctly.
The currents details of the deal are:
- Approximate purchase price: $1.4M
- Value of the land (when split and sold as two separate lots): $1.2M each = total $2.4M
- Cost of demolition: $25K
My ideal scenario would be to sell one parcel of the lot and build a home/rental on the other side. However, I’m unsure how to finance this for a few reasons: A) I only have $90k max to put down, B) if I acquired a hard money loan, the sale of one parcel would still leave me with 200k left on undesirable loan conditions. And I would still need a construction loan or path to build the rental.
I understand I could sell both - but is there any way to refinance or creatively finance this to meet my end goal of a house/rental in this area?
