All Forum Posts by: Lynn Currie

@Josiah Cammer

I'm a builder. How can I help?

Land and structures are taxed separately. When you create the condo regime, it will be filed with the county and they will divide the taxes to 2 tax bills accordingly.

In theory, you are only adding the value of the new structure for tax purposes. An exception of this is if you have exemptions on the property (i.e. a homestead exemption). If they see this is a significant remodel they can come in, reassess, and remove the exemption to reset the baseline. I'm not sure if they would do this on the front house if you don't do anything to it. 

@Amenity Applewhite The biggest advantage is that subdividing is a city zoning process - it will cost you around $30k and 12-18 months. A condo regime is about $2500 and 2 weeks using a lawyer. The city is not involved.

@Tanim J B. What do you mean they won't let you make a second entrance? Are you talking about just an entrance or will they not let you add another driveway?

@Stewart Wyne hard money lenders often want to be in a first lien position (which the bank will already have). Private equity might be your best bet on this, but be prepared to show your investors that appraisal and discuss it with them as part of your disclosures.

In my experience, lenders want more equity in the land loan than the construction loan, percentage-wise.

Here is an example using @Scott Krone 's numbers.

The lender might want 40% down on your $35k land, so you need $14k for the down payment on the land. The construction loan *might* be done on ARV and you *might* need only 25% there, which while it's less percentage-wise, it's more money at $25k.

In Scott's example, the numbers seem to be a wash because your ratio of cost in land to build is only 35% (at 35k). In another market where land costs more than construction, your numbers can shift a little. Say your land is $50k and your build+soft costs are $25K.  In this case you would have to raise more than 25% of the total loan value to hit the 40% down payment on land.

Make a quick call to a lender in your area. They should be able to tell you what % they generally want down for the different portions of the loan. 

If builders are buying houses in the area, tearing them down, and then building, whatever they bought the tear-down for is likely the value of the lot. Based on your post, I'm guessing that value is $600k or somewhat lower. 

Don't get caught up on price per square foot of a tear-down house. It may be somewhat arbitrary because the value is in the land under it.

If you price it properly and there are builders in the area, it will sell even on the MLS.

I hope that helps. Tag me if you have follow-up questions.

@Arlen Chou I'm glad you like them! We love working on them.

I don't build in Dallas at this time. I'll be up there in December with a couple of other builders for a conference and if I meet someone that you might like, I'll put you in touch.

I got into real estate right out of college because it simply made sense to me. My reason/goal was simple, real estate excited me (and still does) and I was certain that I could set myself up for a successful future. I understood the math and could clearly see that by buying and renting out properties, I could build wealth. I started like most people do, I bought a house, fixed it up, and rented it out. Over the years while my friends were buying new cars, I would save my pennies and buy properties, eventually moving away from residential rentals and moving into commercial properties. Today my full-time gig is real estate. I do development, build spec and custom homes, and invest in commercial and multi-family projects.

At this stage in the cycle I haven't changed geography, but I am more intentional with my specs and development projects, and I started doing more custom projects about 2 years ago in order to build that side of my business.

I post photos of work in progress on my FB page https://www.facebook.com/lynncurriebuilds/

Finished work goes to http://starlingdevelopment.com/our-work/

Shoot @Jenifer Levini I should have flown in early enough to go to your SC meetup and then hopped a ride up to Oakland! @J. Martin are you going to make it?