A farm house on 2 acres in Manzanita OR is for sale. I was told the 2 acres could be subdivided for an investment. Is subdividing a good investment?

Asked by Squareone Properties, Llc, Scotts Valley, CA Sat Jul 31, 2010

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Bob McClure, Other Pro, Walled Lake, MI
Sat Jul 31, 2010
hi....usually it is a good investment...as a rule, collectively, the seperate parcels can be valued higher than just the 2 acre parcel by itself.....be sure to allow entry to all parcels if you do sub-divide....and discuss what possible divisions with the local township ..lastly....if you mortgage the property...don't forget, the lender has an encumberance on the entire parcel which would prohibit you from selling any of the newly subdivided ones without paying off the loan...as a suggestion...however you subdidivde the parcel...try to allow the remaing farmhouse and the land beneath it to hold sufficient value, curb appeal and functionality that it can be refinanced to pay off your mortgage, and have the remaining parcels free and clear...when you approach the township for approval to subdivide, you will need a survey company to re-write the legal discriptions..give the new legal discription to the refinancing lender so the new loan will only encumber the farmhouse and the land beneath it...it will take some work and research, to structure things....
best regards
bob mcclure
mortgage one
brighton, michigan
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David Waite, Agent, Beaverton, OR
Sat Jul 31, 2010
That really depends on where it is exactly. I could research the property for you if you give me more info.
How close to the beach is it? Is it view property? Is it cleared acerage? I would be happy to help, just get back with me.
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Curt Abramson, Agent, Santa Cruz, CA
Sat Jul 31, 2010
It can be, but there is a lot of risk involved. You need to know that local regulations will permit it, need to understand what improvements will be required, and you need to ba able to figure in the costs of those improvements. I've done it a couple of times with success, but the whole concept is based on increasing demand for the finished product ( one or more parcels) and based on appreciation. Neither of thosefactors have been present in the marketplace that much lately. Due diligence is critical.
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