All Forum Posts by: Kyla Nicole Nickerson Jones

Hello all! 

So I'll hop into it - my grandmother left my brother and me five properties throughout the city of Seattle. Two of the houses are currently on corner lots in the Central area and zoned as Low rise multifamily. My brother and I are brand new to real estate investing but have already renovated two of the houses, with varying success. We want to build on each of the lots in the next 5-10 years. We understand that new construction is approx $400sq ft (estimating high), and the lots are big enough to build 5 units each. (we're thinking 5 townhomes, at approx $1600 sq ft); we're also hoping to hold and avoid selling (with the caveat that this makes financial sense). My questions are: 

1) Since the lots are owned free and clear how scared should we be of financing 100% of the project with a construction loan? Our worry is that since we're inexperienced this could be a huge risk. We've considered selling some of our properties to leverage the building and reduce our total loan amount but would love to hear your thoughts on this strategy. 

2) Should we opt for a small apartment building - thinking economy of scale? 

3) Does anyone have resources/builders or connections they would recommend? Always open to mentorship. 

Appreciate the guidance, 

Kyla

Hi BP!

My grandmother recently passed and left my brother and me a windfall. Three houses (zero morgtages) all within the Central District, Seattle. Prime location! My brother and I have no interest in selling but eventually plan to build a few townhouses on the site. 

Right now the houses are in terrible condition - like 30 plus years of neglect, almost condemnable. Our plan was to spend some money getting them to renter-friendly condition (by borrowing against the properties/ no money down). However, we've received some sticker shock. Like, our budget of 50-60k per house is actually closer to $110k per house. Now, we're faced with how much we want to invest in homes we eventually plan to tear down. Our plan was to wait 3-5 years to begin building. 

My immediate plan was to hire an inspector to see what is a priority to fix in the short term. 

A few questions: 

1) Should we just demolish and pay maintenance costs - and not gain any rental income? 

2)  Should we refinance the homes and just take the minimal cash flow? 

3) What are other options I'm not considering? 

Thanks!