Underwriting Random Deals - 1

I saw a vacant lot listed near Silver Lake and Rampart Village border that fit into our profile. A 49’ by 142’ lot with front/back alley access sitting on a gentle slope zoned R3. By right we could develop it into an 8 unit apartment. I decided to sketch it up and plug it into our underwriting app:

Looks like after filling squeezing all the parking, I could only fit 7 units at max with 3 buildings. The dreaded thing about developing in LA is the archaic zoning code for parking, fire department passage, and setbacks. I could’ve designed it as a one building apartment but the building code is suddenly upgraded with stringent open space requirements and ADA parkings. We’ll get into that next time.

I put the sketch into our rendering app and give it shot. Now the ground floor looks like this:

we might have an issue with the parkings in the alley setback but that could be cured at the planning depending how much alley space they could give us.

The lot looks very similar to our 7 unit BRKLYN Heights - 354 project, except the rent is higher. However, since there’s a hillside ordinance, we’ll need to order a soil report in order to find out how much cost we‘ll have to put in for grading and foundation. Maybe the higher rent will offset the higher cost of construction? Who knows, we’ll see.