Here is what you need to think about from a developers mindset.
How much would two new homes go for? Homes that would fit per zoning requirements.
Demo costs for house on there now?
How much would improvements cost?
Carrying Costs and closing costs (including real estate commissions if the developer uses a real estate company)
Cost to build each unit?
Calculate all those things and they will be able to see how much profit is in the project. You think the market is saturated with homes, try taking a look at lots on the market. Here in philadelphia and surrounding market, there are enough land listings to last 5 years in terms of buyers with the current sales stats. talk about saturation.
Here is another option for you. Not saying it is the best option but what about going into a joint venture with a builder. You front the land, they demo, improve it and build. You walk with a preset amount from the sale. Doing it this way will most likely net you much more in the long run as they dont need to finance the purchase of the lot which can be a pain to get from a bank nowadays.
my website: http://www.AbbasiTeam.com
Seller resources: http://189172.yourkwagent.com/atj/user/SellerResourceGetAction.do
Why put a roof on it?
I remember chatting with you. Why not just market it to buyers with a 203k renovation loan? $11,000 isnt just spare change to be putting into a property.
If you want to chat again, just drop me an email at Sean.Dawes@LNF.com and I would be happy to talk.
Part of the puzzle is how much other inventory is available and what does it cost.
Example - there is a house in my market that sold for $600,000. They took the house down to the footings and left the chimney, and ran out of money. That leaves a lot for $600,000. A developer will look at the end result first...if I build a house on that lot, what will it be worth? Probably, in that neighborhood, $650K for a three or four bedroom house. So the builder subtracts the cost of construction, the fees for financing, insurance, etc. and probably ends up with something under $350K that he would be willing to pay for the land. I am not going to go farther with this, but you get the idea.
In your case you may have some options:
Having a residence on the property might be a plus for a developer. They can rent out the house, use that to offset their carrying costs until they get permits to build what they want to build.
The biggest factor is the market. That's way having a market expert explain to you what the upside potential may be will help you make the best decision.
You are on target with your possible choices but need to know what the possible "sale price" could be for each scenario to be able to come to an informed decision.
It sounds like throwing money into a "money pit" would be ill advised........
You are on the right track.....but keep collecting important information.
The Eckler Team