Development Deal With Great Potential--Now What?
Hi All.
I’m looking for tips, guidance, suggestions here.
I was in Oregon looking at property last month. Before I left I told my realtor to see if she could find a chunk of land that would lend itself to subdividing and selling off in smaller pieces. Darn if she didn’t listen to me. These are the circs:
24 acres
County area, just outside the city limits of a steadily appreciating area. Land and homes are tough to come by
$750,000 purchase price
$180,000 assumable
$150,000 OWC
$420,000 for me to bring to the table
1 acre lots in the area are selling in the 100k range.
Water and electric are nearby, no sewer yet.
The land is pretty clear except for mature trees.
I would like input on what type of financing options you would recommend. Also, how best to proceed. Split to one acre lots, or 2.5 acre lots, or what? Add the roads or not? Really, any input will put me ahead of where I am now.
(Nancy C., I am re-reading your book, good stuff)
I’ve built on a single lot, never done a deal like this….Would hate to lose the farm, or get stuck in a deal I can’t finish.
Thanks in advance for any input, Brian
Make sure you ask the approximate cost to hook up to the sewer as well....that can be a deal breaker in some cases.
Do you know the process for subdividing the land in your city or county? If you do, it could be very profitable. You just have to make sure if you have a loan on the property that your lender knows what you want to do and can be cooperative. Normally, a lender must lift their lein to allow a subdivision go through and then have leins on several different lots. It baffles me how many banks could not do this for me. Banks are stunningly uncreative. Anyway, once you have it subdivided, you can just sell the lots on the market and sell the house on a smaller lot. In my county, however, it takes about 9 months for the subdivision process to go through. How patient are you?