Developing a single family subdivision

13 Replies

Hi,

I am looking for information on how can one go about developing a single family subdivision? I am wondering if someone can share some insights into following:

1) How to go about rezoning?

2) How to do about getting public utilities?

3) What is a typical development process/cycle for building a subdivision?

4) How to estimate costs for each step?

5) What all should the proposal cover for getting financing on the project?

6) How to go about finding a right partner for the project? 

It would take a book to answer all of those questions... Not to mention, much of the information is going to be County and state specific.

If you're starting from scratch, my recommendation would be to find a local investor who is doing what you want to do and offer to take him to lunch. Figure out a way that you can add value to his business and perhaps he will help you get started.

@Himanshu Jain   you could also pay a civil engineer probably 500 to 1000 bucks and they would write it out for you that is specific to your location and jurisdiction.

I do this when I am looking at new areas. I hire a civil and pay him to do due diligence for me.

VERY CHEAP insruacne

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Originally posted by @Jay Hinrichs :

@Himanshu Jain   you could also pay a civil engineer probably 500 to 1000 bucks and they would write it out for you that is specific to your location and jurisdiction.

I do this when I am looking at new areas. I hire a civil and pay him to do due diligence for me.

VERY CHEAP insruacne

 A civil engineer could help with Steps #1-3...the other three steps are the hard ones, and that's really something that you're not going to learn without some hand holding and/or experience...

It really depends on your experience level and where you are at. Every state/county/city will have different rules and utilities. Not everything needs to be rezoned. It's not uncommon to find a parcel of land for sale that is already approved for a subdivision. It will be very difficult if not impossible for you to find financing for the project if you have never done it before. This is the kind of thing you need to finance yourself or get creative with private loans.

I'm working on building my own neighborhood of 2-4 family homes, I am purchasing six acres that is already zoned for such use, and, the minimum lot size in the city is less than 1/4 acre. I am able to carve 21 lots out of my 6 acres, I'm paying in cash and I will be the guy out there on the tractor digging the holes for utilities and clearing driveways.

The lot I am purchasing is zoned for up to six residential units per tax lot, which means as six acres I could only build six units...but as soon as I start cutting it up into smaller lots, each lot can have it's own six units. That's up to 126 units total I could build and I don't even have to ask the city for anything. It's already zoned for that...

@J Scott   you know me I only read to about line 3 then send in my 2 cents.

Developing if you trying to do with really no real estate background is a pretty difficult thing

financing would be next to impossible unless you had very deep pockets.

finding partners same thing.. no way with no experience.. would need the old friends and family route to go through your learning curve

Originally posted by @Himanshu Jain :

Hi,

I am looking for information on how can one go about developing a single family subdivision? I am wondering if someone can share some insights into following:

1) How to go about rezoning?

2) How to do about getting public utilities?

3) What is a typical development process/cycle for building a subdivision?

4) How to estimate costs for each step?

5) What all should the proposal cover for getting financing on the project?

6) How to go about finding a right partner for the project? 

 My question would be directed at your first question..... How to go about rezoning? Are you currently looking at property that is not zoned for a single family dev.?  

If you are interested, I can speak with you on how to go about developing what would appear to be a single family subdivision, but with a built in multi-dwelling hybrid twist!  

@Account Closed   just because a property is zoned is not a green light and an assurance you can do what your describing.. it helps but that is just the start.. and what your talking about is what we called in the old days 4X4 ing... most places don't allow that anymore they will allow one split them make you name the last parcel a remainder.. ( like parcels you will see at tax sales.)

But I did do a 7 lot split in North Charleston in SC and it was VERY much eaiser than anything west coast.

Not saying it can't be done but 126 units is a lot of density and usually takes a lot of work to get hammered out.. more than just splitting

That's why I said it totally depends on where you are at. Where I am at, even if I need a zoning change, it's a $700 fee. They will change the zoning to almost anything. Not picky at all. The guy I spoke to at the city literally told me almost anything would be possible or could be changed so long as I apply for the right permit. The biggest concern they have is that I provide at least two off street parking spaces per tenant. I could make it a trailer park or a commercial/industrial development if I wanted also. It may end up with mixed uses.

Additionally, the lot is currently on a tax deferral for growing timber, and I'm only going to develop it one subdivided lot at a time. That means the part I'm not using yet has next to no taxes on it. And I don't need a very large loan to start building.

Another thing to think about in a situation like this is that trees are worth money. I suspect that I can recoup about half of what I'm spending on the six acres just from the timber that needs to be cut down anyway. It's full of old growth hardwood...

Originally posted by @J Scott :

If you're starting from scratch, my recommendation would be to find a local investor who is doing what you want to do and offer to take him to lunch. Figure out a way that you can add value to his business and perhaps he will help you get started.

 Thanks Scott, Appreciate your inputs. Do you think I should work with a local developer or with an out of state/town developer? I was thinking I could add value to a out of state developer or investor who is looking to expand. I am a real estate agent and have been investing in real estate for last four years now. I have a good network of vendors, contractors that I work with on regular basis.

Originally posted by @Carl Leninger :
Originally posted by @Himanshu Jain:

Hi,

I am looking for information on how can one go about developing a single family subdivision? I am wondering if someone can share some insights into following:

1) How to go about rezoning?

2) How to do about getting public utilities?

3) What is a typical development process/cycle for building a subdivision?

4) How to estimate costs for each step?

5) What all should the proposal cover for getting financing on the project?

6) How to go about finding a right partner for the project? 

 My question would be directed at your first question..... How to go about rezoning? Are you currently looking at property that is not zoned for a single family dev.?  

If you are interested, I can speak with you on how to go about developing what would appear to be a single family subdivision, but with a built in multi-dwelling hybrid twist!  

 Thanks Carl, I will reach out to you to see if we can chat sometime

Originally posted by @Jay Hinrichs :

@Himanshu Jain  you could also pay a civil engineer probably 500 to 1000 bucks and they would write it out for you that is specific to your location and jurisdiction.

I do this when I am looking at new areas. I hire a civil and pay him to do due diligence for me.

VERY CHEAP insruacne

Thanks Jay, that is a good idea. How would you go and find someone like this in a new area?

I work in the Planning & Inspections department for a municipality, and the answer to the first 2 questions all depend on the City you're developing in.  You'll need to know the costs and time frame for receiving permits, which would play in to step 4.  I would meet with somebody in the planning and zoning department in order to get started on this.  Even though city employees usually aren't allowed to make recommendations for specific companies (due to conflict of interest), they can give you information on civil engineering firms, architects, and/or developers who have worked on specific projects in the past via a public records request, or you can simply ask.  From there you can contact the companies you find.

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Thanks all for the inputs. I did speak to the city officials and there are some restrictions, it allows be to rezone to upto 4 SFH only. Difficult to work with that low number.