Investor · DFW, TX · Member since 2013 · 319 posts · 101 votes
Hi All!
So, I was looking on Zillow at this ~700 acre lot in the Catskills listed for $10m. At first I was bummed that I won't ever be able to afford something like that, but then the juices started flowing.. Curious to hear others' experience and advice on possible strategies to acquire large amounts of land without tying up a ton of capital?
Something along the lines of - first buy a large parcel then either...
- subdivide off resi lots and maybe even build/sell the homes on them
- operate an airbnb glamping or similar business
Hopefully recover most of the capital in and be left with a decent chunk of the initial parcel.
Would love to hear other creative ideas or your success stories...
Developer · Member since 2020 · 4k+ posts · 4k+ votes
11mo
OP we have only bought two pieces without a business plan in mind. The price was right for both of them for us to hold.
If you don’t have a plan don’t buy.
If you can’t handle the $10mm then you can’t buy and develop. Thus you need to look at subdividing. Key features to determine subdivision value. 1. Shape of property. 2. Road access
3. Utility access or water well potential. 4. Views
5. Boulders
6. Trees
7. Water bodies, existing or you can build
8. Walk out basements
9. Proximity to towns or highways. 10. Property usage.
A. Assume 7% sales commission on the back end.
B. Use $50,000 in surveying
C. $1mm roads, electric, internet. Just for kicks.
D. Permits????
E. Interest holding costs say at 7.5%. Assume 3 to 5 years to sale depending on location and market. F. Road entrances???? Say $200k
G. Assume bank requires 40% down.
Even before you become creative you have to jump thru the above. We don’t do these kind of deals unless we have plan 100% to 150% cash on cash return in 3 to 5 years. Otherwise not worth the risk.