# selling to infill homebuilders



## CrazyEights (May 17, 2016)

Hi CMF,

I'm wondering what would be the best approach to market/sell parcels of land I have to infill home builders.

I have a two side by side lots in solid locations in Edmonton that my brother and I have decided to sell, and wondering what the best way to open the sales to developers? The homes are ideal for either investors or first time home buyers also as they have legal suites in them, but the two lots together are large enough to develop possibly 3 'skinny homes', and just want to ensure we don't miss out on any type of potential buyer. Note: we aren't in a rush to sell, as they are in good locations, and make good money for us. We're selling because we just want to pursue other opportunities and take our cash out.

Is it appropriate to even contact some home builders to see if they are interested in purchasing (not sure if it looks desperate, even though we are not)? Is simply just posting on the MLS the best approach? or Is it really just simply finding a realtor that is able to find that buyer? sometimes i wonder if all the realtors simply would do is just post the listing on MLS

Has anyone on the forum made any private deals through REIN or real estate meet ups before?

Any insights or perspectives would be appreciated. Thanks guys.


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## nobleea (Oct 11, 2013)

CrazyEights said:


> Hi CMF,
> 
> I'm wondering what would be the best approach to market/sell parcels of land I have to infill home builders.
> 
> ...


Depends on what area - where is it?. If there are spec infill builders in your neighbourhood already, I'd approach them. I know a few that do this in south central and west central. A lot of builders do spec as a full time job, so they have to have a pipeline of properties available to keep their crews busy and their income steady. Sometimes that means buying a non-ideal property on the market, just to make sure there's something to do. It would probably have to be a pretty desirable neighbourhood to make a 2 for 3 lot work since the lot purchase is a big portion of the costs and most of them just do a straight up lot split (1 for 2) instead. On some corner lots you can do a three way split (1 for 3).

I'd probably list both of them simultaneously on MLS with a note in the listing saying the neighbouring property can be purchased and combined.


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## CrazyEights (May 17, 2016)

nobleea said:


> Depends on what area - where is it?. If there are spec infill builders in your neighbourhood already, I'd approach them. I know a few that do this in south central and west central. A lot of builders do spec as a full time job, so they have to have a pipeline of properties available to keep their crews busy and their income steady. Sometimes that means buying a non-ideal property on the market, just to make sure there's something to do. It would probably have to be a pretty desirable neighbourhood to make a 2 for 3 lot work since the lot purchase is a big portion of the costs and most of them just do a straight up lot split (1 for 2) instead. On some corner lots you can do a three way split (1 for 3).
> 
> I'd probably list both of them simultaneously on MLS with a note in the listing saying the neighbouring property can be purchased and combined.


Thanks Noblea.

Regarding area, the properties are located in Queen Alexandria, so i'd imagine its pretty desirable.
I guess its just a matter of finding infill builders that are already in the area as you say, but if they are approached, would that enable them to have more leverage in negotiations?


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## 319905 (Mar 7, 2016)

Developers/builders in the area will decide amongst themselves which will bid on the properties and how much the offer will be. Any one who thinks they can get some sort of bidding war going on between builders/developers must have been listening to an agent  Well, that's my understanding ...


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## nobleea (Oct 11, 2013)

CrazyEights said:


> Thanks Noblea.
> 
> Regarding area, the properties are located in Queen Alexandria, so i'd imagine its pretty desirable.
> I guess its just a matter of finding infill builders that are already in the area as you say, but if they are approached, would that enable them to have more leverage in negotiations?


Yeah, queen alexandra is pretty nice - you see some infill happening there.
I'd ask a few realtors what a realistic selling price would be for the properties individually, then approach the spec infill builders. They had better be able to pay more than the combined price if the lots are truly valuable in a 2 for 3 lot split scenario. You don't haVe to sell to anyone. You should be able to get a good idea of market value. I can't see how the developers would have much leverage.
Spec infill in Edmonton is very much a small time operation. The vast majority of them will do between 2 and 8 spec projects a year.
The builders that finished our house do about 6 spec homes a year, but only a couple of them are with their own money as developers. The rest are separate investors who are the developers.


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## CrazyEights (May 17, 2016)

Is there a directory for spec infill homebuilders, or is it merely just going for a walk and finding out who built the infill home (i'm imagining that's what likely is the case)

I'm pretty sure it can be done for 2 for 3 lot split scenario. Based on my real property reports, the combined lots would be just under 23 meters in width. From my basic google search, the City of Edmonton had approved lots for for just over 7 meters in width. Depth wise wouldn't be an issue. Already a few skinny homes in the area.


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## nobleea (Oct 11, 2013)

It's essentially 25' wide that you can split to. The measurement is actually in metric so it might be a few inches shy of 25'. So it sounds like you're close enough. One can buy a 50' lot in similar areas for 350-425, which means about 200K for a 25' lot. So 3 lots would go for just over 600K. Are the individual houses worth more than 300K? I would guess so.

This is a few years old, but might be helpful:

Who's swinging the hammer? Top 10 infill developers by number of applications in 2014
Infiniti Homes, 15
Tech View Homes, 13
Engelman Construction, 12
Eastern Horizon Construction, 10
Homes by Element Construction, 7
Kirkland Homes, 7
Ace Lange Construction, 6
Skyview Homes, 6
Effect Home Builders, 5
Graphtec Design & Consulting, 5

I know that Infiniti is to be avoided, they may be bankrupt and are involved in many lawsuits. Ace Lange and Effect don't do spec as far as I know.


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## nobleea (Oct 11, 2013)

You can also go on the city assessment map and show open applications within a certain radius. It would probably take you an hour to find all the companies that pulled permits on infill in a few neighbourhoods.


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## CrazyEights (May 17, 2016)

Thanks for the quick info Nobleea. Very much appreciated.

Yeah the combined lots should just be enough from my calculations, since i'm more or less working with 75 feet, and since lots need to be about 25 feet. You're right 50' lots could be bought in that range, but they are getting fewer and far between in that area. Yeah the individuals houses are worth more than the 300K.


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