So I am sitting on a Duplex zoned for residential 2 in Miami. The area is about to be annexed into a very desirable city within the county. The properties on both sides of my duplex have gone up for sale. To the left lies a duplex identical to mine. To the right lies a 4-family apartment complex.
Here’s what I am thinking. I suspect that if I can acquire all three properties, there is a strong possibility that they can be sold together at a price greater than their aggregate individual prices, especially considering the propensity for development within the area. My difficulty lies in the fact that none of these properties can generate sufficient rent income to sustain the mortgages I would have to pay. My solution is to get these properties under contract, at the lowest possible deposit amount that the buyers would accept, and then shop the properties out in an effort to assign the contracts. But if I fail to do so, I would lose all my deposit money.
I am not crazy about taking out an ARM or Interest-Only mortgage to hold me over, but it may be an option I should consider. To be honest, I am not even sure where to begin as far as contacting developers is concerned (I have some ideas, but none really make me want to jump up and expose myself to personal liability), and 90 days may not be enough time to find an interested developer. I know that forming an LLC or some other form of corporate entity can help me avoid personal liability, but I may not be able to get the entity up and running before another buyer snatches these properties up. Even so, getting these palces under contract with such favorable buyer terms may be a pipe dream.
So what are you guys thinking? Any suggestions would be greatly appreciated.