Transition To Developer
How is the best way to get started in developing? My husband is a civil engineer and hates working for others. We have 3 SFH rentals (Plus our personal residence). We are thinking about getting into development for our next investment. He has the know-how to develop a site, so we aren't worried about that. Our big problem is that we don't know how to start. We are thinking of finding a dividable lot that has a SFH on it already and going that route to gain experience. Or, would it be better if we tried to throw in with a more experienced developer on a big job by supplying cash and leanrign from them? If so, how do we find these people - and if we do find them, how do we evaluate their expertise and our level of risk in our giving them $$? My hubby is actually doing the civil on a 5 acre/20 lot develop/build project where it seems the owner is hinting that we could invest... but this is the owner's first development attempt and we think they have a very romatic view about the outcome (not a hard-core business person type). This makes us nervous. Any advice on how to get started?
Yeah, for starters trust your gut when it tells you that guy is too romantic.
Second in what way does your Hubby hate working for others? Is he an employee currently or does he have his own shop?
You might team him up with an attny to do sub-divisions and zoning changes and sell to developers who would do the actual building.
Thanks for the advice. The attorney idea is a good thought. We know a few of those in town -even some who specialize in RE.
My husband worked as a sole proprietor consultant when we lived in Seattle. Now he is an employee at a firm. Either way, he generally doesn't like being at the end of the food chain (churnign ourt plans on deadlines FOR the developers who are makign all the dough)
I'd be inclined to start with a small site. Actually, I think your idea is a good one of taking a property that has a single-family detached house on it and spinning off one or more lots. Your husband might be able to do something like this as a "minor" subdivision and you'd have an asset (SFH) fairly quickly to sell. Get your feet wet and go from there.
Having a Civil engr on the team is GREAT!
Now get a good GC lined up, or does he want to sit for his GC license. (hmm, can a civil engr just take the test?)
AJF,
I take it the possible deals would be around Bend. Nice area and likely to be a number of options.
If you want to stay at the lower end then definitely look for small lots that can be divided. Put the word out to realtors that you are in the market.
I would skip working with the owner who is new to development. They will teach you little and likely become a boat anchor in any deal. If they want to hire your husband then fine. If they want to sell to you and retain an interest with an option or something so that they do not have control that might also work.
John
[addsig]
Getting a good RE lawyer on board is a great idea, even for splitting SFH lots. As a civil engineer, husband should have some insights about local politics already, but he may not be privy--yet--to all the details and dealings that can go on regarding developments and subdivision of lots. There are zoning rules and other intricacies that must be navigated; best to get a good idea of what will be involved before you sink serious money into a deal. SInce you cannot simply assume everyone will like your ideas and plans, make and/or nurture friendships in city government, and be prepared for community opposition, which is always possible and which is best addressed early on.