Commercial zoned land good or bad?

Question

I Have an opportunity to buy over 5 acres of wooded land in a commercially zoned area. .25 miles from walmart and lowes. The traffic light .25 miles away counts 30,000 cars on average per day.  The ask is under 40k and it is wooded without utilities but they are obviously close by.  What do I need to know about commercial realestate? I have some properties in residential but not commercial so I'm hoping some people can give me some advice

Justin Tahilramani · Answer

I would be very skeptical if I were you. Its likely that the land has serious issues that would make development prohibitively expensive to impossible. Off the bat I would be looking for the existence of wetlands and determine what the land is zoned for.

We just had a Super Walmart open in our town. 5 acres across the street is listed for $1M....

Environmental and traffic considerations are huge when it comes to commercial real estate.

Edward L lauckern · Answer

Thank you for your advice and I will follow through with it this week!

Dave Peirce · Answer

Edward - I ran into that when looking at a smaller parcel recently (a waterway spliting the property).  There were a few considerations for me:

-  What types of building is it zoned for?  If not what you want, do you know the re-zoning process in your area (and how willing the zoning board is to grant changes)?  Do you have an idea of how much permit and related fees will be (Greg Dickerson had a recent blog post on the start of the development process you may find helpful).

-  Do the sellers have any sort of site map/plan, showing terrain, measurements, etc.  As this will give you an idea of what may be possible with the site (due to set backs, etc).  However, grading and hauling in dirt can get expensive very fast if it is hilly or below level.  If you are really interested, try contacting some civil engineering firms in your area and see how much it would take for them to give you some estimates (usually starting with a site map and then doing some snowballing for some potential, to help you figure out if it is viable or not; the ones I spoke with had quotes ranging from $600 to a few thousand).

-  You mention that this is .25 miles away from a Walmart.  However, like the other poster mentions, is this on the main through fare or some back road without a lot of traffic?  As the former potentially has more value than the latter.

-  Waterways can often be moved.  However, this may depend on the storm water management plan of the town the parcel is in.  Again, this can range from affordable to insanely expensive, depending on the exact requirements.

-  What would your end game be?  Developing it yourself (and if so, do you have any experience doing so or deep pockets)?  Wholesaling it to a developer?  Doing a JV with a developer to get experience?

Edward L lauckern · Answer

Upon looking into this further .. it is not a wetland persay but I noticed a creek splits the entire property in half

Edward L lauckern · Answer

Ok