All Forum Posts by: Tom Munro

@Scott Trench @Bruce Woodruff @Chris Mason @Bill B.

Thank you all for your feedback.  

So, let's assume that I sell it as the package deal to a developer who builds the exact plan, so they can therefore use the permits.  The next question that I would ask you all to guess at, is how much does value does that "package" add, versus just buying essentially raw land that you don't know if a project like this is buildable?  

Sorry, I think I wasn't as clear as I should have been.  

The plan would be to demo the existing home in order to make room for the new commercial development. 

If we sell the property, it would be to a developer or an investor (if they wanted me to act as the General Contractor) with plans to use the permits that we produced. 

I hope that helps clarify things. 

Question - I'm looking for opinions on how much a property increases in value when all the permitting process has been completed?  

Background - I've recently moved across the country so instead of building this project for myself to hold long term (which was the original plan), I'm contemplating getting through all the permit approvals, and then selling the property as a ready to build package. 

I have a single family rental property on nearly an acre, locating in a rapidly growing community in NW WA. I'm in the process of applying for permits in order to convert it from a SFR into a commercial property. The plans are for a mini storage facility (3 buildings totaling 11,000 Sq ft) along with an 1,800 sq ft retail space. Cost to build the facility will be about $1.4 million including permit costs. For this type of development in my area, the permitting process is fairly extensive and costly (roughly $50,000 before the cost of the permits). Based on local prices, our estimates are that this property will generate around $16,500 in gross monthly revenue once its developed and fully rented. Making the value of the property roughly $2.5 million.

$16,500 monthly revenue minus 30% for expenses x 12 months = $138,600 annual net revenue. CAP rates in the area are roughly 5.5% so, we're looking at $138,600/0.055 = $2,520,000

As a residential property, Zillow/Redfin estimate that it's about a $510,000 value.  Obviously, once we're through the permitting stage and have all of our approvals, then most of the risk has been mitigated.  My question is how much does that increase the value of the property?  

Thank you for any feedback!

I have a situation where there is a large, old church for sale. It’s a 5000+ sq ft building and it’s zoned residential. Based on the city code, It’s possible to renovate this into a large duplex, but I’d like to more effectively use the space and somehow create more rental income. 

Doing anything larger than a duplex (triplex, 4 plex etc) is not an option based on the code.  

Does anyone have any ideas or experience on ways to work around something like this?  

Maybe a large SFR with individual suites that can be rented?

@Theresa Harris

Thank you Theresa. This was very helpful. I have spoken with 2 house moving companies, 1 has been to the house and both have been very helpful. Great advice about getting names from prior customers! 

The route is very direct with only 2 power lines to get under. The house is a short 2 story and based on preliminary measurements, we should be able to squeeze underneath the power lines.  

The basement is something else I didn’t think about. That could be an easy way to add a rental or more sq footage. 

@David Krulac 

Thank you for your input and advice. Sorry I wasn’t more clear. I will ABSOLUTELY be using a professional moving company on this.  

Hello, I am new to BP and loving all the resources so far.  

I have a project where Im planning to move a  2000 sq ft SFR about 4 blocks (stick built home, NOT a mobile). I run a handyman/maintenance business, but have never done a project like this. I'd love to get some input from anyone with knowledge or experience...whether it's positive, negative, cautionary, anything...

Here's some info about the project:

- The house was built in 2000 and is in pretty good shape. The land its on now is going to be a large housing development so they need this house gone.

- Its free if I can make the deal work.

- I have gotten numerous rough bids from subcontractors for plumbing, electrical, HVAC etc. For my budget numbers, Im trying to be very conservative since I've never done this kind of project. I'm assuming a full house re-wire, re-plumb and replacing the existing furnace and ducting - I understand that I may not need to do all that, but I'd rather plan on that and be positively surprised.

- I'm planning on another 50k in random repairs - new cabinets, drywall, interior and exterior paint, etc. NOT including the permits, dirt work, foundation and moving costs.

- There is a 1,000 sq ft unfinished attic that may be able to be finished out, potentially making it a 3,000+ sq ft house. Budget for this is not factored into the 60k mentioned above.

My plan is to get a HML to help fund the project and then re-finance/rent it or flip it. I'd love to hear thoughts about any of this but specifically, I'm curious about what kind of ARV I could expect. I have heard that selling a home "Not built on site" can reduce the sale price by upwards of 20-25%...Is that accurate with anyone's experience?

Thank you for any advice.  

@Tim Olsen

Great information. I am running numbers on moving a 2000 sq ft SFR about 4 blocks. I run a handyman/maintenance business, but have never done a project like this. I'd love to get your input or anyone else's as well - positive, negative, cautionary, anything...

Here's some info about the project:

- The house was built in 2000 and is in pretty good shape.  The land its on now is going to be a large housing development so they need this house gone.  

- Its free if I can make the deal work. 

- I have gotten numerous rough bids from subcontractors for plumbing, electrical, HVAC etc.  For my budget numbers, Im trying to be very conservative since I've never done this kind of project.  I'm assuming a full house re-wire, re-plumb and replacing the existing furnace and ducting - I understand that I may not need to do all that, but I'd rather plan on that and be positively surprised.  

- I'm planning for another 60k in random repairs - drywall, interior and exterior paint, etc. NOT including the permits, dirt work, foundation and moving costs.  

- There is a 1,000 sq ft unfinished attic that may be able to be finished out, potentially making it a 3,000+ sq ft house.  Budget for this is not factored into the 60k mentioned above.

My plan is to get a HML to help fund the project and then re-finance/rent it or flip it. I'd love to hear your thoughts about any of this but specifically, I'm curious about what kind of ARV I could expect. I have heard that selling a home "Not built on site" can reduce the sale price by upwards of 20-25%...Is that accurate with your experience?

Tom