Looking for advice---my Uncle passed away several months ago. My brother and I inherited his duplex. It is in 78704. He bought in for $40k in 1978 and current tcad appraisal values the 0.27 acre lot at $1.05m and the two units (approx 1800 sq ft total) at $250 for a total appraisal of $1.3m. My brother and I would like to "cash out." My uncle got a postcard from a guy who supposedly specializes in cash offers. Of course, he didn't want to make a cash offer ("too expensive"), but he would love to represent us and recommended listing at $799k. I understand the units need some work and I know interest rates are high, but am I missing something?

Oh check Travis CAD for market value for ballpark worth. Not a great source but at least you know what they think it's worth. They are usually low btw.

Zilker neighborhood, clear title, renter in rear unit (Uncle lived in front unit). Lots of new construction in neighborhood and my Uncle always thought the next owner would demo and build something new (good size lot at 0.27 acres).

I thought about doing that. I would have to buy out my brother (I think he's more interested in cashing out and I don't want to be a business partner with him). The lot is 0.27 acres, how big do you think I could go re: two units? The current units are both about 900 sq ft, so I'm guessing each unit could probably be 2500 sq ft. How much do you think that would cost and how much do you think they would sell for?

Highly valuable real estate. Talk to representation with your best interests in mind. Pull up Zillow, realtor.com, Redfin and look in the immediate vicinity of your property address. Could tell you a decent amount very quickly. Since you would have to GC the project, Assume $250-$300/SQFT for construction in your location.

If it were me, I would consider leveling the units and selling it as a build ready spec house/custom house lot opportunity. I'm just spit balling though.

MS08 said:

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Highly valuable real estate. Talk to representation with your best interests in mind. Pull up Zillow, realtor.com, Redfin and look in the immediate vicinity of your property address. Could tell you a decent amount very quickly. Since you would have to GC the project, Assume $250-$300/SQFT for construction in your location.

If it were me, I would consider leveling the units and selling it as a build ready spec house/custom house lot opportunity. I'm just spit balling though.

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You have a property worth a million bucks, probably would be good to hire a highly experienced local appraiser and get some objective advice.

SteveBott said:

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Not sure those saying redevelop know how difficult that is in Austin. It can be a nightmare actually. Not sure you could even get it approved. Austin does not like taking affordable housing and confer to McMansions. I would sell as is and let an experienced developer handle it.

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The nightmare is what makes it so much fun!

I would lean towards holding and leasing myself if you can handle the buyout aspect. I'd love to own in Zilker, but missed the ideal buy in time.

I know the Austin market well and have 4 duplexes in S. Austin but not in the same A+ area. As was mentioned, if you are going to go on your own to redevelop/build, you better know what you are doing.

The pitfalls for anyone not experienced are potential nightmares esp if you need to take out a construction loan. I have done many complete to the stud renovations in Austin and even with my connections/experience, I would not touch it in this environment.

Shooter McGavin said:

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MS08 said:

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Highly valuable real estate. Talk to representation with your best interests in mind. Pull up Zillow, realtor.com, Redfin and look in the immediate vicinity of your property address. Could tell you a decent amount very quickly. Since you would have to GC the project, Assume $250-$300/SQFT for construction in your location.

If it were me, I would consider leveling the units and selling it as a build ready spec house/custom house lot opportunity. I'm just spit balling though.

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You have a property worth a million bucks, probably would be good to hire a highly experienced local appraiser and get some objective advice.

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Yeah, don't do this. Find a good realtor.

BearJew13 said:

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Shooter McGavin said:

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MS08 said:

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Highly valuable real estate. Talk to representation with your best interests in mind. Pull up Zillow, realtor.com, Redfin and look in the immediate vicinity of your property address. Could tell you a decent amount very quickly. Since you would have to GC the project, Assume $250-$300/SQFT for construction in your location.

If it were me, I would consider leveling the units and selling it as a build ready spec house/custom house lot opportunity. I'm just spit balling though.

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You have a property worth a million bucks, probably would be good to hire a highly experienced local appraiser and get some objective advice.

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Yeah, don't do this. Find a good realtor.

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Get a good, not cheap, appraiser that works that local market. Call the big producers in the area and ask for an appraiser recommendation. Use the information from the appraisal while interviewing those that stand to make a big commission.

An appraiser is an objective third party with no skin in the game, a straight shooter. The "good" Realtors call me every day to "pick my brain" in helping the with pricing.

BearJew13 said:

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Shooter McGavin said:

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BearJew13 said:

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Shooter McGavin said:

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MS08 said:

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Highly valuable real estate. Talk to representation with your best interests in mind. Pull up Zillow, realtor.com, Redfin and look in the immediate vicinity of your property address. Could tell you a decent amount very quickly. Since you would have to GC the project, Assume $250-$300/SQFT for construction in your location.

If it were me, I would consider leveling the units and selling it as a build ready spec house/custom house lot opportunity. I'm just spit balling though.

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You have a property worth a million bucks, probably would be good to hire a highly experienced local appraiser and get some objective advice.

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Yeah, don't do this. Find a good realtor.

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Get a good, not cheap, appraiser that works that local market. Call the big producers in the area and ask for an appraiser recommendation. Use the information from the appraisal while interviewing those that stand to make a big commission.

An appraiser is an objective third party with no skin in the game, a straight shooter. The "good" Realtors call me every day to "pick my brain" in helping the with pricing.

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As a developer talking to an appraiser, we're probably not going to see eye-to-eye on this. Whenever a seller tells me that their land is worth "$x" because they have an appraisal that says so, all I hear is someone who doesn't care what the market may have to say.

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Im sure postcard guy made the same pitch

I would recommend against trying to build or develop.

It's an absolute nightmare in Austin. It's very hard to make money unless you are the builder.

Build costs are still $300 - $350 a ft if you are lucky.

Legit question -- Do those postcard guys ever get any suckers takers?

I've been getting those forever on raw land in 2 or 3 Texas counties, and it's rare they even offer 40% of CAD value.

But, just the other day, I got one on my personal residence. Now, I don't live in the Jed Clampett mansion, nor do I dwell in the Park Cities, but I'm in a well-established neighborhood and my place ain't no shanty, either.

They offered half of CAD value. I mean, is the postcard guys' strategy the same as that of a nerd at the singles' bar -- Ask a thousand women. It only takes one?

BearJew13 said:

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Shooter McGavin said:

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BearJew13 said:

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Shooter McGavin said:

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MS08 said:

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Highly valuable real estate. Talk to representation with your best interests in mind. Pull up Zillow, realtor.com, Redfin and look in the immediate vicinity of your property address. Could tell you a decent amount very quickly. Since you would have to GC the project, Assume $250-$300/SQFT for construction in your location.

If it were me, I would consider leveling the units and selling it as a build ready spec house/custom house lot opportunity. I'm just spit balling though.

---

You have a property worth a million bucks, probably would be good to hire a highly experienced local appraiser and get some objective advice.

---

Yeah, don't do this. Find a good realtor.

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Get a good, not cheap, appraiser that works that local market. Call the big producers in the area and ask for an appraiser recommendation. Use the information from the appraisal while interviewing those that stand to make a big commission.

An appraiser is an objective third party with no skin in the game, a straight shooter. The "good" Realtors call me every day to "pick my brain" in helping the with pricing.

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As a developer talking to an appraiser, we're probably not going to see eye-to-eye on this. Whenever a seller tells me that their land is worth "$x" because they have an appraisal that says so, all I hear is someone who doesn't care what the market may have to say.

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Wouldn't an independent appraisers valuation be exactly what the market has to say? They're using recent sales comps. If they're any good, it is exactly what the "market has to say".

Depends on the appraiser and his local market knowledge.

Just like anything else, there's good and bad.

I have my own biases but a local market expert is usually going to be a lot more useful in this situation. Easier to find that with agent vs appraiser.

Appraisers are generally behind the market. They are seeing deals that went under contract months prior.

In addition to just the sale price there are a lot of factors that determine value. Zoning, utilities, access, visibility, site orientation, etc.

Also- do you want a 90 day close or are you willing to let someone go get the property fully entitled? As well as other negotiable contract terms that are going to affect what someone may pay for the property.

Realtors/brokers are seeing those terms negotiated in real time, and a lot is changing week to week. Heck look at what the 10 yr has done…They also are seeing deals that are falling out of contract or getting re-traded. An appraiser can't speak to these things in the same way.

BearJew13 said:

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Appraisers are generally behind the market. They are seeing deals that went under contract months prior.

In addition to just the sale price there are a lot of factors that determine value. Zoning, utilities, access, visibility, site orientation, etc.

Also- do you want a 90 day close or are you willing to let someone go get the property fully entitled? As well as other negotiable contract terms that are going to affect what someone may pay for the property.

Realtors/brokers are seeing those terms negotiated in real time, and a lot is changing week to week. Heck look at what the 10 yr has done…They also are seeing deals that are falling out of contract or getting re-traded. An appraiser can't speak to these things in the same way.

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False, completely false.

A good LOCAL appraiser has all of this information and shockingly we have a magic device that allows us to speak to local agents and developers. You think all of those factors are some giant secret that we can't uncover?

Diggity said:

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Depends on the appraiser and his local market knowledge.

Just like anything else, there's good and bad.

I have my own biases but a local market expert is usually going to be a lot more useful in this situation. Easier to find that with agent vs appraiser.

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Exactly. A good local appraiser will run circles around most agents with some exceptions. There are great local agents that will be more in tune with some properties, however a good appraiser has that agent on speed dial.

Believe it or not, the really good local agents and I speak often. We share information and get perspectives.

Also, an appraiser does hundreds of deals per year, an agent does far less, most don't do more than 20. I have data in my files that the agents are not privy to - data is king.

I live in Austin but I am not a realtor or lender. However, I do own or manage for my family 14 units consisting of 7 duplexes in the Austin MSA. I know a good investment realtor who owns 3 duplexes herself. If interested DM me.

The good news for you, because of the stepped up in basis, selling the duplex should not result in any taxes due if the duplex is not worth more than what it was on the date of death of the owner.
Cheers.