How Do Builders Determine Where To Build?
Where do the big guys turn to decide whether or not to go ahead and buy a large parcel of land and build a huge subdivision? What type of analysis is done and where do they get the statistics?
I am a small developer. No simple answer. We go where we can sell homes.
I recenlty ordered a feasibility study that told me what the market would bear in a certain area.
I am in South FLorida, so the growth here is rampant.
Tell me more about what you want ot know and why.......
[addsig]
cost
comps
max retail
pretty much same as investing in pre existing housing....
with a much bigger risk factor....thus much bigger pay off!
Here is a little insight for the small developer/investor of residential property. Buy next to the big guys! They have done the study, there is a lot of activity in the area already and you can cash in on it
Quote:
On 2003-09-21 16:27, GFous wrote:
I am a small developer. No simple answer. We go where we can sell homes.
I recenlty ordered a feasibility study that told me what the market would bear in a certain area.
I am in South FLorida, so the growth here is rampant.
Tell me more about what you want ot know and why.......
What areas in Florida do you think are on the verge of popping?
Burnt store road area, just between Cape Coral and Punta Gorda is where I am putting my money.
Also East Fort Myers up the river.
[addsig]
My first experience in building was back in 1949. I was stationed at an Air Field Called Moses Lake. The Colonel of the base called me in and said he wanted house's for the married airman and get to it. I imediately purchased a very attractive piece of desert land between the Base and Town. I went into Seattle and found a Mortgage broker who arranged a combination FHA/GI loan for each of the 300 houses I had decided to build. So a nice builder built these little two and three bedroom gems which I sold to all of the top three graders on the base. $100 down and a mortgage for around $3,200 for the balance, and a letter to repurchase if they got transferred. I would at that instant give them their $100 back. As you know the Korean war started, all the troops were moved out of Moses Lake and started to Korea. Then Masses of new troops moved in and I started renting the houses for $125 a month to the new officers and their families. My payments were about $45 a month and now a lowly Captain was rich. My god given a little time I could have paid for my own airplane. Of course as all things must it came to an end. I was collecting rents and one man was behind a month. I banged on his door, Told him to pay or else. I looked up it was the new Commanding Officer of the Base. Shortly thereafter I put all these properties into the hands of a management co. Why you ask, very simple. The Monday following my rent collections I found myself standing to attention in the Colonels Office as he arranged my imediate transfer to Korea. Within a month I was eating Kimchi and peering down at the Yalu. Oh yes I sold all the houses for $9200 each. Now thats how I learned how to select a proper location for construction Cheers Lucius
Quote:
On 2003-09-21 19:32, GFous wrote:
Burnt store road area, just between Cape Coral and Punta Gorda is where I am putting my money.
Also East Fort Myers up the river.
Thanks. I was just about to look at North Port which isn't far from these two areas you mentioned. My focus is flipping vacant building lots, not so much development. I like the GDC communities because of all the pre platted lots.
Quote:
On 2003-09-21 19:32, GFous wrote:
Burnt store road area, just between Cape Coral and Punta Gorda is where I am putting my money.
Also East Fort Myers up the river.
Also, what do you think of Port La Belle? Is that too far up the river? That's another GDC community I'm starting to watch for any signs of popping.
Thanks!
I do not know much about that area, but would be willing to look. Let me know what you find. I build. I think UP the river is a good thing. Drop me a PM,
[addsig]
For what it's worth.
The larger builder/developers in my area, as well as smaller ones, myself included, will look at optioning properties that are in the path of local improvement areas. Such as extention of sewer lines and the annexing of county property into a citie's
impact area. If you will notice, the cities zoning is usally different than the county zoning. If a city decides to enlarge their impact area than normally the zoning densities increase, thus allowing rural areas a higher zoning density. This density increase is what the developers count on for their potential profit. There is good money to make if you are patient.
In my area (PA), builders decide on an area based on several factors: what product they want to build; the price range they want to build in; if they need public utilities, then areas that can be serviced by them; market absorption rates; mindsets of individual municipalities (pro vs. anti development); future-oriented issues like growth, industry relocation or expansion and other factors that may be included in muncipal comprehensive or master plans; proximity to their other existing building sites; ability to land bank (or not); realistic potential for zoning change; statistics obtained through local, county and regional planning bodies. Those are some of the issues for market due diligence. Then, of course, there are many site-specific issues once they've selected a particular area (i.e., county, muncipality, school district) and are then searching for a particular property.
Quote:
On 2003-09-21 17:22, Stockpro99 wrote:
Here is a little insight for the small developer/investor of residential property. Buy next to the big guys! They have done the study, there is a lot of activity in the area already and you can cash in on it <IMG SRC="images/forum/smilies/icon_cool.gif">
Good idea! I am looking at a property across the street from a new 5000 home sub-divsion. Its not much compared to that but its got lots of potential. Its approx 150x121 feet.(50x40 yds)
hey guys and gals, im a newbie here but decided to put my two cents in on this one. Im in Oklahoma, any football fans in the house? I am a third generation land surveyor and a graduate student studying regional and city development. A feasibility study is the way to go, many times a pro development municipal government will opt to pay for such studies and the information is public if you have your research skills honed. Very basic things to look for when considering development are zoning (or feasibility of rezoning) and infrastructure requirements. If you can't run water, electricity, and sewer, you can't build houses. A good working knowledge of the areas power grid capabilities and water/sewer lines is a starting point. A civil engineer will be able to tell you if its going to cost you 50 grand or 5 million to run sewer, water and electricity. If the land your looking at has no current utility easement you cant build this infrastructure and you've just bought yourself X acres of worthless land, at that point, buy a tractor. Happy hunting!! - Ishia