Subdividing lots near Pensacola, Fl

14 Replies

I'm Interested buying several lots ranging from 1-4 acres for a total of 12.97 acres. Many of the lots have things that would need to be removed like septic tanks, oil tanks, trailers, house etc. None of which I really see as salvageable. I was thinking I could clean up the lots get them sub divided and ether build a neighborhood that could have 15-75 SFH built or an apartment complex on them. This looks like it would involve having 1 or 2 county road build as part of the sub division. Not sure whether I would hand off to a builder or what after that. I already own 5 houses as a buy and hold investor 4 of which are in this area. I am aware this could be a several year project. But I think it would be worth it.

My goal for this are:

-Effectively clean up area and improve the neighboring area

-Make some money by packaging a SFH or multifamily apartment complex/development

Here are a few questions

Who would I talk to about re subdividing? Civil engineering firm?

Would it be best go it alone or partner with someone?

How would to determine to just do the packaging or go all the way with the building?

How do you check whether it is more feasible to go apartment or SFH?

I think I remember a podcast on this anyone remember?

I don't have any direct experience yet with developing, but I've done a little research.

I'd suggest that for a project of this size you would want to start with a feasibility study. It's quite a bit different from flipping a home that's already built and zoned. For getting the zoning and subdivision done, look into getting an expediter on your team. It'll cost you some money, but should save you tons of time, and of course time is money in this game.

Good luck with it. I'll be following your post.

Make sure you wont have issues with flooding because a lot of the land in that area is kind of "Marshy".  Lived there for 4 yrs and flooding can be an issue sometimes.  The idea is promising and I would suggest an area where growth is happening or attractive to the military population.  

These are legal questions. Better get yourself a competent real estate lawyer in Pensacola. If you do not have one, PM me and I will make a referral. Good luck.

@Matt T.

  for free waltz into the planning department and speak with a planner... either over the counter or if they will set an appointment... this will give you a heads up on what is permissible use... once you think its still doable.. then go see a good land planning firm that may also have a civil with it.  Hire them to do a feasablity study  usually 3 to 5k.. and then if it looks good you can start down the path they lay out for you.

Any specific information on BP will just be ramdom hearsay you need to talk to the people in charge of the area.. each municipality or county is different one size does not fit all.

I certainly don't want to come off as the buzzkill on you here, but the mere fact that you are asking these questions on Bigger Pockets shows that you have no business biting off a project this large.  There are a TON of things to consider when developing land, ESPECIALLY if they have "oil tanks" as you mention. You have to have a phase 1 environmental study done, not to mention a wetlands survey, and depending on the results you could be required to do a phase 2 or 3 environmental study. This is something that you would need a an attorney for, and you will spend a LOT OF MONEY on inspections, surveys, engineering, etc.  This is not a strategy for a beginner, or someone who would even consider soliciting advice from a website like this.  You're in way over your head here. Please go do something smaller, I beg you. Divide up an acre before you divide up 12. Walk before you run. You'll thank me later.

I don't have specific advice, I have not done developments. I just want to give you my vote of encouragement. I bought a trailer park last year which took me way out of my comfort zone. I spent weeks reading regulations and visiting the state agency I would be dealing with. I learned a ton in a short amount of time. Everything did not go as planned and is taking longer to stabilize than I originally thought. Just make sure you have the reserves needed.  I would do it again in a heartbeat. Good luck!

Btw- love the Pensacola area. Just got back from a vacation there a couple weeks ago. 

Originally posted by @Matt Robinson :

I certainly don't want to come off as the buzzkill on you here, but the mere fact that you are asking these questions on Bigger Pockets shows that you have no business biting off a project this large.  There are a TON of things to consider when developing land, ESPECIALLY if they have "oil tanks" as you mention. You have to have a phase 1 environmental study done, not to mention a wetlands survey, and depending on the results you could be required to do a phase 2 or 3 environmental study. This is something that you would need a an attorney for, and you will spend a LOT OF MONEY on inspections, surveys, engineering, etc.  This is not a strategy for a beginner, or someone who would even consider soliciting advice from a website like this.  You're in way over your head here. Please go do something smaller, I beg you. Divide up an acre before you divide up 12. Walk before you run. You'll thank me later.

While I appreciate the information you shared about the phase 1 and 2 environmental studies you come across as a know-it-all. I made it to one of your PIG meetings and your know-it-all comments here today come across as inconsistent with the helpful group you had advertised the Guild to be. Frankly, it shows me the flaws in your leadership. Who are you to judge that I have "no business" here and that I'm a "beginner"? Do you read a BP profile and you think you know enough to judge? In my career outside of real-estate I have accomplished things you could only dream about. If you have something constructive to comment about I'm all ears otherwise keep your mouth shut. You'll thank me later.

Hey Matt, you're right.  I re-read my comment, and it definitely didn't come off the way that I intended.  I'm big enough to admit my faults and apologize for the tone.  That being said, trying to be as constructive as possible here, what you outlined in your post is a VERY advanced strategy that VERY few investors pull off successfully.  Only the most experienced investors with extremely deep pockets and a strong support team should venture out into what you are considering. 

While my response may have come across as snarky or know-it-all, the message is still very true.  I'm glad that you have been successful in previous businesses, and for that I applaud you.  I'm sure you are way more successful than I am, way smarter, way savvier, and all those other things.  I've never claimed to be an expert at anything. 

But if you come on Bigger Pockets asking for advice from people who have done this particular aspect of business more than you, you should be willing to accept their advice.  And the bottom line is, the fact that someone would be soliciting advice on BP for something this advanced is a red flag that they me be getting in a little over their head.  That's not intended to be condescending...just honest feedback. 

Listen, I hope you knock it out of the park.  I hope you become the world's leading land developer and make billions of dollars.  I'm not trying to talk you out of developing land or trying to crush your dreams.  But in the tiny, infinitesimally small amount of success that I've had compared to you...I have in fact counseled, coached, and advised hundreds of real estate investors.  And you need to be REAL CAREFUL with what you are venturing to do, because it is fraught with risk, and I'd hate to see you lose all of that money you have made in your other successful careers. 

I have seen the existence of oil tanks not be remediated properly, and it end up costing a developer $500,000 to remedy the situation, including the environmental impact and the cost of fees and penalties levied against them.  I have seen investors buy waterfront property without appropriate wetlands studies and surveys, only to find out most of the land is unusable, and unable to be developed.

Again, my advice is worth what you paid for it, so take it or leave it.  Either way, I apologize again for typing a quick message to try and help, without consideration for how its terseness might be misconstrued as rudeness.  I wish you all the best!

And you can contact Geoffrey Maddux at GLM & Associates in Navarre if you need someone to handle you Phase 1 or 2 ESA, or other environmental consulting like petroleum and hazardous waste, etc.  850-939-8037

Originally posted by @Matt Robinson :

And you can contact Geoffrey Maddux at GLM & Associates in Navarre if you need someone to handle you Phase 1 or 2 ESA, or other environmental consulting like petroleum and hazardous waste, etc.  850-939-8037

Thank you for your constructive comments. I have explored other sources and have found the level of complexity you describe to be true. Not impossible but complex. If nothing else I have found learning about the planning and zoning code to be valuable.

Have you had any other experience with a Phase 1, 2 or 3 environment inspections? Any idea what the levels cost? I assume depending on the findings you could use the results as leverage in negotiation with the seller just like a home inspection on a SFH.

It's been about 7 years since I had much intimate involvement with the ESA inspections (you can probably guess what happened 7 years ago to slow that down...haha.)  I'm sure prices have changed quite a bit, but I know a Phase 1 was fairly inexpensive because it's just a basic review to see if they need to dig further...anywhere from $1,000 to $3,000.  However, if it's a very complex deal or large piece of property, it could run in the tens of thousands.  Phase 2 and Phase 3 go up from there depending on what they find and the necessary level or discovery and remediation.  And yes, you are correct, almost all vacant land contracts have a very open feasibility study period that allows you to walk for any reason.  So, if you found something in a Phase 1, you could certainly go back and renegotiate price, using your findings as leverage in that process. 

@Matt T.

  phase 1 is usually 1k or so.... its a review of historic aerial Photos... site visit and quick check of public records and may include some talk to neighbors. this is meant to establish historic uses.. this study will tell you whether you need further studies.. I am doing a 25 lot one in Charleston right now.. 

So here is our process in a little more detail.

1. got property under contract and back of the napkin see if it pencils.

2. did phase one  it came out clean 1k   this is a MHP that's on city sewer and water.

3. We are next to tidal water so did a cursorary wetlands map so I could give that to the civil that we hired to do a due diligence run.  cost 1,500

4. hired civil for due diligence package.. IE this will include which is what we need to know how much will it cost us to develop this property and what lot layouts would work best.

And what is the timing getting through the various state and federal agencies. 3,700 for this.  So for this deal we will risk about 6,200 to decide if we even want to do it.

If there was any kind of major remediation we would probably pass.. if there is any huge wetlands issue we will probably pass... or we would go back to seller and renegotiate.

Hope that helps a little.   But as I state you want to talk to the agencies that dictate your permits, and then a civil that has platted property in the area for many years they will know most of this stuff its their business.

Land Development is not that complicated but it can be expensive and time consuming and majorly frustrating.... what you think its going to cost usually you need to add 20 to 30% by the time the agencies get done with you  :)

@Jay Hinrichs. Thanks, that is informative. I wen to a zoning board meeting today and found out how involved rezoning is. BLUF- if you can avoid rezoning do it. In my county you have to submit an application to the building code council, advertise with in 500 ft radius of the property and after the BCC approves you still have to be approved by the county council. and that is assuming no one objects.  

@Matt T.

 Public notice for a rezone is standard in every jurisdiction I have worked in.. same with filing your pre plat.. and you will usually have dissenters.. rarely does the public come out in support of a Developer... being the big bad boys we are

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