All Forum Posts by: Michael Douglas Christensen

@Allan Smith @Josh Braun thanks for the replies. Useful to know. 

The average price per sq ft for the end purchase price on some of these I recently analyzed was $262. So for a 2,000 sq ft house that is $524,000. If a builder can place two of these on the existing lot the end sales price would be $1,048,000. 

However, this formula seems to break down a bit if the sq ft of the new home goes up. If the builder is building two homes at 2,500 sq ft or 3,000 sq ft this drastically changes the final purchase price of the land. 

For example, with two 2,000 sq ft homes at 23% the land would be worth $241,040. However if the two homes are both 2,500 sq ft then the land would be worth $301,300 at 23% (retail value of $1,310,000). You see the problem with this formula? I guess the best way to find out is to contact builders and ask what they are willing to pay? I am planning on calling a bunch on Monday to see if I can get a better idea of land values. I have 3 leads in this area and am unsure what to offer the sellers without a better picture. Thanks again for the responses. Really appreciate it. 

I'm curious what people are buying land for in the Nations / North Nashville TN area? Recently getting calls from potential sellers interested in selling and feel that the house should be knocked down and repurposed for HPR. If this is the case, can any home builders speak to what they are buying land for in these scenarios?

@Eli Ziegler thank you for the response! That is really helpful information. A lot of information I hadn't considered.

Hey BP. I recently moved to Nashville for work and purchased a home with an unfinished basement. The initial plan was to finish the basement and rent it out as a sort of house hack while we live on the main floor. However, my wife has concerns after watching some YouTube videos that basement apartments in TN may not be viable. She mentioned that because the house was built in 1979 the foundation is prone to leaking water and it would be very difficult to prevent this from happening and subsequently destroying the finished basement. She also mentioned that if we install floors in the basement (currently just concrete) it will mess up the leveling with the stairs which will be against code. I don't know much about this but this seems odd to me and I would assume that there are many investors in Nashville that have basement apartment rentals. Can anyone speak to this and help me understand if I should be overly worried about this before pursuing finishing off the basement? I am very much a novice when it comes to DIY fixer upper stuff but want to learn more as I attempt to fix up the basement (and hire out some more complicated stuff). 

Thanks for the input everyone. Very helpful and insightful. Sounds like HML is probably not the best way to go for this scenario.

@Upen Patel I've thought of doing that but I talked to a person who does loans to prequalify and I was told a 203k loan is a ton of paperwork and very difficult to get. I'd ideally like to do this quickly had was hoping to avoid a lengthy process.

@Andrew Michael thanks! I've heard that with a rental there is a seasoning period before a bank will lend so you have to wait to refinance. Does this hold true if you're moving into the fixed up property as a primary residence?

Hi BP! Is it possible to use a hard money lender to fix up a property and then use a conventional mortgage to pay off the hard money lender if you want to move into the fixed up property as a primary residence?

@Ryan E. & @Rebecca Belnap your posts have been very helpful. Thank you both!

@Chris Martin thank you that's very helpful!