The LAAA Team of Marcus & Millichap is pleased to present this significant price reduction for 10637 Mount Gleason Ave in Sunland, CA.

This listing is currently a 30,892 SqFt lot which has a single family house in the front. The seller has a tentative tract map to split the lot into 6 different small lots. The plan will be to keep the current house in place in the front, and then for the 5 other lots, a developer can build 5 single family homes. In the end, a savvy investor/developer will be able to have 5 brand new homes plus a fully renovated 1940s home on 6 different lots/APNs. Then, the developer can sell them off individually for a very strong projected profit.

The list price of $1,550,000 is broken down into two sections: 1) the value of the single family house as-is, and 2) the value of the 5 lots that will be developed.

Section 1: Value of Existing Single Family House ($600,000)
The current house is 1,555 SqFt, 2 Bed / 1.75 Bath + a Bonus Room, and it was built in 1943. After the subdivision, the house will sit on a large 8,540 sqft lot.

After a detailed review of recent sale comparables in the area, we have found that older homes of around the same size are selling for about $650 per sqft on average, after being renovated. Using this average sale price/sqft, we can assume the post-renovation value of this house will be around $1.0M, plus or minus a bit. There is no doubt this older house needs some work, but with our current estimate of value at $600,000, the buyer of the property will have a lot of room to spend on improvements and still achieve a healthy profit.

Section 2: Value of the 5 Lots to Build 5 Houses ($950,000)
After subdividing into 6 separate lots, there will be 5 vacant lots to be developed into new construction single family homes. Per the Tentative Tract Map, the 5 lots will be an average of 4,502 sqft each, and then a developer can build an average home size of 2,016 rentable SqFt.

Per our research, we believe these 5 future new-construction homes will sell for an average of $1,200,000 each (about $600 per SqFt on average).

Our current assigned value for these 5 lots is $950k, which means each lot has a value of $190,000. With the assumption that it will cost about $300 per SqFt to build, each house should be about $605,000 in development costs.

All put together, if a developer sells each house for $1.20M on average, and the cost per lot is $795k on average (land cost + development cost), there will be over $400k in gross profit left over on each lot. In total, that is over $2.0M in gross profit available for all 5 lots combined.