I am looking for suggestions on the best resources, book and/or programs to educate myself on new property development. There is a 43 acre property on the market in my area that is prime for development. With much of the work done to annex into a village with ample services for single family, multifamily or nursing home facility pre-approved and much of the legal work done this could be a great opportunity. Any insight from folks who have been involved in these projects is much appreciated.
Hey Chip, welcome to Bigger Pockets
New Property Development Info
Personally this site is the probably the best place i have seen to find resources like new development, wholesaling, fix and flip, buying and holding etc. I looked at your question and did some research for you. Follow the link below. Its from the Bigger Pockets Blogs on New Developments. There are several articles here that make mention of real estate development resources and people who are member here on Bigger Pockets who have more knowledge and information than myself
Have a great day
Chip years ago when I started out BP was not around. So I bought a few books and started reading. But eventually you will have the book down and get out there. I would start small and work your way up to larger projects. Development has a lot of moving parts and you missing one step can cause a very costly lesson. I think looking for a mentor or partner would be a great idea. Also differnernt cities and municipalities have vastley different rules concerning zoning, utilities, curb and gutter, ground water run-off etc. A simple project from the outside is still very complex. If development was easy more people would do it. You have to be sure you know or have idea of the value of the highest and best use of the property as well as if that can be developed on that site at a price you can make money at. I am weary of projects that are primed for development that no one is developing.... There is usually a reason that. Do you research and then do it again and then do it one more time. If possible I would try to tie up the dirt with an option that included plenty of escapes and gives you enough time to do your due dilligence.
This 43 acres, are there utilities, roads in place, curb and gutter, proper zoning?
For someone with no experience, tackling a large project like that will be difficult. Not to say it can't be done, but you'll likely find yourself doing things in a very suboptimal fashion -- which will have tremendous impact on both your budget and your schedule.
My best recommendation is to find an experienced developer in your area, and offer to partner with him on the deal. Basically, give away some equity in return for the management of the project.
Thanks everyone for your input. I realize doing any kind of development of this size (or any size for me at this stage) will require partnership with more experienced developers in my area. I would no doubt learn a lot from any experienced developer that might partner with me, but I never approach anything without preparation. My original investment plan was to purchase 2-4 family houses one per year or so, stabilize and hold. I have one 3 family with stable tenants and good cash flow. Since I started reading BiggerPockets I am learning to think bigger and not discount something until I know it does not make good business sense.
My initial conversation with the owner of the property revealed that there are utilities at the street bordering two sides. There are no roads, gutters, curbing or utilities in place within the 43 acres. While it needs to be verified, it was stated that the zoning is in place and pre-approved for single family, cluster homes or nursing home facilities. There may be other possibilities as well. Some soil testing has been completed. There is work underway to annex this property into the bordering village where the infrastructure is in place with capacity to handle a sizable development with sewer and water. Much of the legal work has been started. All that said, I need to learn and understand much more about all of this.
Kenneth, thanks for the straight talk and questions to be asked. Exactly the input I'm looking for. Much of what I need to learn surrounds researching the feasibility of any kind of project on this site. . To your point, why has this not been done already with so much preliminary work started? The property is for sale by owner so I'm unsure of the motivation for sale at this point. I will likely enlist the help of my broker to dig up any information of previous listings and anything else known about this chunk of dirt. Cutting out commissions by dealing directly with the owner sounds feasible for a small deal but experts are needed for the big ones I have to believe.
Gerald, thanks for pointing me in the right direction on Bigger Pockets by category. Looks like some quality reading in my immediate future.
J Scott, your suggestion to partner up and share the equity was what I assumed I would need to do. I didn't want to bring up the subject of searching for partners in this post as I didn't want to sound like my intent was to market for that. I am highly interested in finding a partner/mentor.
Again, thanks everyone. Any and all information is greatly appreciated. I'm a new investor and I'm soaking up information like a sponge.
I think that's great advice from @J Scott
Try to find someone local who is involved with development, and try to take them to lunch. Most people need to eat, and hopefully you will find someone willing to help out, even in a small way.
Best of luck to you!
43 acres is really two sets of development projects. The first is the infrastructure, the second is the vertical. There are plenty of developers who just do the first half and sell the build ready space to a home builder. You can also do both. They are completely separate skill sets and usually have completely separate legal hurdles to jump.
Setting up the phases for financing and your exit strategy will be paramount. Schedule delays also cost a lot more on big projects than small ones. Bad scheduling can bring a big project to an untenable halt which is less likely for small projects.
For your first project I would just hire someone else to do it with a good track record. You would act simply as an investor and promoter. Rely heavily on the experienced developer / builder. You will learn a ton by watching the books and schedule. You'll take away most of the risk by using a professional with a long track record. You'll also give up more of the equity because its your first one. That's ok. With the knowledge you get, the next project you will know what areas you can take over confidently to carve out more equity.
Mis-steps in development can turn a project into something you have to complete just to break even. Tread carefully, and I agree with the sentiment above, try a smaller project first. Mistakes will be less expensive.
Thanks very much. This give me more topics to research. The reason this tract has not been developed could be the size of the project. There is a relatively new single family development adjacent to this tract.
I thought this might open the door for a multifamily development with a mixed use consideration to round out the neighborhood with services. I also am thinking a phased approach to this tract would make sense, much like the phased approach in the adjacent development has used.
Great suggestion Andrew. Who doesn't like a free lunch.
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