Step By Step
Howdy,
I have been a REI for the past few years, primarily doing rehab/flips and rehab/rentals. I am now at the point where I want to get into land development and am looking for some experienced info on this subject.
I assume there is probably a good book on the subject, have not been able to find it yet. Any info on this material would be greatly appreciated.
Additionally, if someone could outline the process it would be greatly appreciated.
My Process so far..
1. Find the land.
2. Check zoning (Need info on rezoning)
3. Survey, submit plans, get approval.
4.Build streets.
5. Build/sell lots
6. Cash out
I assume I missed about 30 steps.
Thanks in advance for any assistance.
I would sugest that you start in the development business the same way you probally started in REI. Start small and work your way up to bigger and more complex deals.
Maybe you can find a property to just flip. Then do a rezoing and then flip. Next develop a property from existing road frontage. Finally work your way into a complete development project.
BTW all the above can be very lucrative.
Good luck
Before you submit a purchase offer, I would ballpark the site yield -- the number of lots -- also, ballpark site improvement costs, also determine what the new homes would sell for on the lots. You would need to do this to determine the raw value of the land and therefore, your offer price.
I would suggest that your offer include a feasibility period contingency (at least 90 days) and contingencies for other municipal approvals, such as subdivision and rezoning. During feasibility, your engr will collect data to determine yield, improv costs, development suitability and all other info required to be shown on plans submitted to the municipality.
The key issue is: would development of the property be economically feasible. You don't know this until you know more about yield, costs, value of new construction end product.