Vacant tri-plex now zoned Industrial - Posted by Brian

Posted by ray@lcorn on May 18, 2006 at 19:23:03:


Glad to hear you’ve done your homework regarding the zoning, etc. Land-use regulations are the rules of the game for real estate, and without that knowledge an investor is flying blind.

The good news is that you know more than the owner does. The bad news is that you have some more homework to do.

Your question is impossible for us to answer without much more detail, or being on the ground. A flip of any kind requires intimate knowledge of the market. “Just blocks from downtown” can be a sleeping gold mine or a dead zone. Much depends on traffic patterns, development pressures and trends, demand for property types (as in what is the best re-use for the property?) and the area’s general demographic trends. Develpoment cost will also be an important factor, but that’s getting ahead of the game.

Then there are the physical factors. Access, road configuration (e.g. 2 or 4 lane, stoplight, crossover, etc.) visibility, signage regulations, frontage/depth, parking, infrastructure requirements (e.g. stormwater, W&S, gas, etc.), maximum lot coverage and density. The properties may need to be joined to make a larger parcel to gain the maximum flexibility. That may or may not be doable under an option.

If the industrial zoning is appropriate then you’ll have to determine who is the most likely user, development scenarios (max square footage, etc.), and competitive supply. Which brings up that leveled block across the street… how long has it been on the market? What’s the asking price? What’s the proposed use? And most importantly… why didn’t the developer that owns it also buy the property you’re looking at?

It would take answers to most or all of the above for me to determine the possible value, the time required to market and sell the property, and alternative exit strategies.

You have the home-field advantage of being in the market, and will likely know many of the answers intuitively. But it would be a good idea to consider that a buyer will likely want to know the same things and have the answers ready. That’s a value-added strategy, and a viable profit opportunity.


Vacant tri-plex now zoned Industrial - Posted by Brian

Posted by Brian on May 14, 2006 at 21:17:00:

Didn’t intend on commercial investing yet, but motivated seller has 3 properties: 2 SFH and a tri-plex that has been vacant almost 2 years. Seller thinks it is still zoned R-3 residential and can still be used as such but a trip to the courthouse revealed current zoning is IN-1 (light industrial) and vacancy over 1 year disqaulifies previous zoning use(R-3 as tri-plex). The lot is just blocks from downtown on a major artery and is surrounded by redevelopment. There are only 2 other buildings remaining on the same side and the other side of the block is leveled and currently advertised: “For Sale will build to suit” by local developer. I am meeting with the seller tomorrow and intend on locking up all the properties for 60-90 days with an option to purchase but need solid advice. I am looking at around $50,000-$75,000 for the tri-plex, Does this sound like a good opportunity? To flip for fast cash? Pros and Cons?