SFR Development Questions
I'm putting together my first deal this year. I work for a company that does site work, so I have the construction end of things down. I want to buy a piece of land, put in the infrastructure and sell the lots.
My question is, how do I determine what I can get out of a given piece of land? Number of lots, etc.? I browse the board and keep reading about a feasibility study. What exactly is that and what exactly will that tell me? Also, who does them?
What else is involved in the due diligence process before I actually purchase the land????
thanks
I am a developer in Birmingham,Al. Many factors are involved in pricing www.lots.County and City governments determine how many homes can be built on an acre.Another determining factor is if you have sewers or use septic www.tanks.In my area the lot must be at least 20,000 sf if a septic system is used.[ Edited by NC_Yank on Date 01/18/2004 ]
The due diligence to be conducted will depend on what you want or need to find out about the parcel. What you need to find out will depend on the parcel itself and the particular facts of the situation (see the five critical questions in my recent article.)
The feasibility study basically is the up-front period of time (after contract fully signed) within which you investigate and test and decide if you want to move forward in the deal or kick out.
You can ballpark or estimate site yield several ways, and has been pointed out, yield will also depend on if you have public or on-site utilities. (Of course, definitive answer to number of lots will be what the municipality grants approval of.) For site yield, you can have a sketch plan drawn and also preliminarily, you can use rules of thumb.