Could you be sitting on hundreds of thousands of dollars in untapped real estate value without even knowing it?
If you own a rental property, a home with a large lot, or an underutilized piece of land in Boise, the answer might be yes.
With Boise's updated zoning code, new housing incentives, and the ability to add accessory dwelling units (ADUs), there are opportunities to create additional housing and generate more income from properties you already own.
But here's what most property owners don't realize:
Just because you CAN build additional units doesn't mean you're building the RIGHT units.
In this week's Find Your Next Six-Figure Infill Deal call, I broke down two actual properties we're analyzing at Matson Homes, showing how unit mix, parking requirements, zoning, and development strategy can completely change the financial outcome of a project.
And at the end of the call, I reviewed an investment opportunity involving 38 new cottages, two existing homes, and over $1.4 million in projected profit.
Let's get into it.
1. Same Property. Same Building. Completely Different Returns.
We recently analyzed a property in Boise's North End that already has a six-unit apartment building.
The owner wanted to explore adding more apartments behind the existing building, with garages on the ground level and residential units above.
There were several ways to approach the project.
We could build two larger apartments. We could build four one-bedroom apartments. Or we could design smaller studio apartments and significantly increase the number of units within roughly the same building footprint.
Here's where things got interesting.
Under our preliminary underwriting assumptions, including a 7% interest rate on a 30-year loan and operating expenses equal to approximately 30% of rental income:
Two one-bedroom apartments: Negative monthly cash flow.
Four one-bedroom apartments: Approximately $386 per month in positive cash flow.
Eight studio apartments: Approximately $2,000 per month in positive cash flow.
Essentially the same property, with three very different financial outcomes.
And the biggest difference wasn't necessarily construction cost.
It was the unit mix.
Smaller units can generate more rental income per square foot, potentially allowing you to dramatically increase the property's net operating income and long-term value.
Of course, smaller units also mean more kitchens, bathrooms, utility requirements, and potentially higher management expenses. That's why every configuration needs to be underwritten individually.
The lesson?
Don't decide what you're going to build before determining what makes the most financial sense to build.
2. Boise's Urban Housing Incentives Could Unlock Additional Units
One of the biggest challenges with infill development is parking.
You might have enough land to physically accommodate additional apartments, but that doesn't necessarily mean you have enough room for the required parking.
That's exactly what we encountered with the North End apartment property.
The existing building already uses much of the property's available parking capacity.
Under the standard requirements, adding more apartments would be difficult.
However, Boise's Urban Housing Incentive program creates an opportunity to reduce certain parking requirements when qualifying affordability commitments are provided.
Under the incentive framework discussed during our call, qualifying projects may be able to reduce required vehicle parking by 50%, along with a reduction in long-term bicycle parking.
The tradeoff is that a percentage of the units must meet affordability requirements, potentially including a 50-year deed restriction.
For our North End example, we evaluated a scenario where approximately 10% of the total units would qualify as affordable housing.
Here's what makes this particular property interesting.
The existing building already has several older apartments renting below typical market rates.
Rather than restricting the rents on newly constructed apartments, we explored whether some of those existing units could satisfy the affordability requirements.
If approved, that approach could potentially unlock additional development capacity while minimizing the immediate impact on rental income.
It's important to understand that affordability restrictions, eligibility, parking reductions, and deed covenants require project-specific review and approval.
But the bigger takeaway is this:
Sometimes the zoning code that appears to limit your development is also the code that provides the solution.
3. ADUs Are Great. But What About Subdividing?
Our second example involved a property with an existing three-bedroom home and additional land suitable for development.
The owner initially approached us about building a duplex and an ADU.
That's a reasonable strategy.
But we wanted to explore whether there was a better way to maximize the property's potential.
We evaluated several alternatives, including adding ADUs to the existing home, splitting the property, and developing townhomes with additional accessory units.
One preliminary concept could potentially turn the original property into seven rental doors, including the existing home.
That's a significant difference from simply building one ADU in the backyard.
However, there's an important catch.
The city's parking requirements can change depending on whether accessory units are associated with a single-family home or a multifamily building.
The way you subdivide and configure the property can therefore determine whether the project works at all.
And that's why we don't start with the building plans.
We start with the highest and best use of the property.
Build Now, Subdivide Later?
Another strategy we're exploring is constructing qualifying accessory units while working through the subdivision process.
Why?
Because obtaining permits for an ADU may be considerably faster than completing a subdivision and installing the required infrastructure.
In this particular scenario, we're evaluating how to begin construction on certain units while simultaneously working through the longer entitlement process.
We would also plan shared infrastructure with the eventual subdivision in mind to avoid unnecessary duplicate costs.
The exact sequencing still needs to be worked through with the city, but it's an example of how development planning can improve both the timeline and the financial performance of a project.
4. The Difference Between Building Three Units and Six
We also compared two preliminary construction scenarios on this property.
Option A: Build three additional units for approximately $720,000.
Option B: Build six additional units for approximately $1.2 million.
For approximately $480,000 in additional construction cost, the owner could potentially double the number of new units.
That's roughly $240,000 per unit in the first scenario versus $200,000 per unit in the second.
Of course, those are construction costs, not a complete investment analysis. Financing, infrastructure, rental income, operating expenses, and property value still matter.
But it illustrates why looking at only one development scenario can leave substantial value on the table.
At Matson Homes, we analyze different unit sizes, bedroom counts, layouts, construction costs, and rental assumptions to identify the strongest financial outcome.
We've even incorporated AI-assisted scenario analysis to evaluate large numbers of potential configurations.
The goal isn't necessarily to build the most units. It's to create the most value.
5. This Week's Deal: 38 Cottages, Two Existing Homes, and Over $1.4 Million in Projected Profit
Now, let's take these same principles and apply them to a much larger opportunity.
This week's featured Infill Deal involves two properties in southwest Boise totaling approximately 3.25 acres.
Both properties have existing homes that can be retained, renovated where needed, and eventually sold.
But the real opportunity is in the additional land.
Our preliminary site plan accommodates 38 detached cottages, in addition to the two existing homes.
Why cottages instead of a conventional subdivision?
Because the density and infrastructure economics can be dramatically different.
On this particular site, we estimate that a traditional subdivision might accommodate approximately 26–28 new homes.
By designing a cottage community, we're evaluating 38.
That's approximately 10–12 additional homes on essentially the same land.
And because cottage communities can share infrastructure and incorporate pedestrian-oriented common areas, they may require less roadway and utility infrastructure than a traditional subdivision.
More units, combined with lower infrastructure costs per unit, can significantly improve the financial performance of the development.
The Preliminary Investment Numbers
Our current pro forma projects:
38 new detached cottages
2 existing homes
Approximately $1.45 million combined acquisition price
Approximately $849,000 in estimated investor cash requirements under the modeled financing structure
Over $1.4 million in projected profit
Approximately 2.68x equity multiple
Approximately 47% projected IRR
Roughly three-year development and sales timeline
These numbers are preliminary and depend on successful entitlements, financing, construction, sales, and the other assumptions in our underwriting.
There are also meaningful risks, including annexation and rezoning requirements for one property, construction cost changes, lender approval, and the rate at which the completed cottages can be sold.
We address these through due diligence, financial sensitivity analysis, and phased construction planning.
The investor purchases and owns the property. Matson Homes provides the due diligence, entitlements, development management, and construction services.
You own the deal. You make the major decisions. You retain the development upside.
6. Could Your Existing Property Be Your Next Investment?
Here's my challenge to you.
If you own a property in Boise, Garden City, or Meridian, take a few minutes to investigate what its zoning allows.
Look at the lot size, access, setbacks, existing improvements, and potential for additional housing.
Could you add an ADU?
Could you add two?
Could you split the lot and build additional homes?
Could a different unit mix generate significantly more cash flow?
You might be surprised by what's possible.
And before you spend money on architectural plans or commit to a construction project, make sure you've evaluated the alternatives.
Because the difference between a mediocre real estate investment and a great one often comes down to understanding the property's highest and best use.
Want to Find Your Next Six-Figure Infill Deal?
Every Friday, I host our Find Your Next Six-Figure Infill Deal call, where we cover real estate development education and review actual investment opportunities in the Boise area.
Whether you're looking for your next development property or want to maximize the value of real estate you already own, we'd love to help.
Watch this week's full replay, join our Infill Deal List, or contact Matson Homes to discuss your property.
All investment returns, construction budgets, unit counts, and timelines discussed are preliminary projections or concepts, not guaranteed results. Development feasibility is subject to applicable codes, governmental approvals, financing, and independent due diligence.
