I have a question concerning the possible value of a property if sold to land developers. Here are the need to know facts ( I shall remain vague on some issues in order to maintain confidentiality). The property in question sits on a 36,300 square foot lot in a large city. The lot is surrounded by other homes. The lot is fenced in, the home is a small 2 story 2 bed 1 bath with the combined upstairs and downstairs square footage being 1200. Has very large heated garage/wood shop (around 1000 square feet or more) sepate from the house. Also a large RV carport attached to the garage. Similar homes on 3000 square foot lots are selling for around 150,000. New 1500 square foot 2 story homes in area on 3000 square foot lots are selling for 205,000. The 1500 suare foot homes are being built in subdivisions in mass by a local developer. In this area a lot of 36,300 sf is huge. The way I figure is that the developer who is building the 1500 sf home subdivisions could level the home and shop and put 12 new homes on this property, meaning a total value of 2,480,000 to the devloper. Based on this information, what would be a asking price for the property. Also, this information is known only to me. What would this information be worth to an investor? Bird dogs are routinely paid 500 to 1000 on wholesale deals, so based on the possibly value what kind of bird dog fee would be fair to ask on this info? Thanks for the help.
Also, if this property sounds like a goldmine to anyone else let me know. I may make an offer to option it. And then sell it to a developer my self. The owners do not need to sell, but want to so the offer would have to be worth their while. Based on the fact that the owners are aware of the developmental possibilities of the land, what do you feel would be a good offer to make? Also how much do you feel a land developer/invester would be willing to pay for it. Thanks for any help/insight anyone can give me on this as I know I am being a bit vague.
I can’t answer your question specifically on the value of this, but there are some things you have to bear in mind.
You can’t put 12 3,000 sq foot lots on 36,000 sq feet. You have to allow for access roads, sidewalks, alleyways if they are common in your area, easements, etc.
The developer has to level the first house, parcel off the land, hire a planner to grid out the ‘subdivision’, run electrical, sewage, pave access roads, grade the land, etc. All this before a single house is even constructed. It’s not just a matter of building 12 houses and selling them.
Ranger,
DFWH is right…in addition, the city may have zoning that requires a certain size plot to build on. This lot is just a little larger than 3/4 of an acre (.833 acres)…do you know if the city will alllow a structure on 7/100ths of an acre (0.069)?
Keith