Buying a residential lot that has a slope to it.

10 Replies

There is a lot for sale in a well loved community and I thought of buying it and holding it or possibly building on it and selling the property. The owner is selling their home and wants to sell the lot with the home at a discount. If they are unable to sell the lot with the home they will be selling the lot by itself for about 7k over the tax value. I’m wondering how to price out the land and if it’s worth buying. The lot is about .28 acres and  has a hill so the driveway would be at the high point of the lot and if a house is built it would be at the low point of the lot so I am concerned about water. There are a few other 2 story homes (2300-2900 sq ft) built next to the lot that have the same slope though so it may be okay. The lot is also full of trees , so some of them would need to be taken down. I know that the houses around it are selling in the 330 -420 k range depending on the size of the house and the lot is being sold for about 50k. I was thinking of building and reselling. Is it more costly to build on a slope with trees to remove and are there more concerns? I have never done this before and I was wondering what the first steps would be or how to determine if it’s worth it to purchase to build. Any input would be appreciated. Thank you!

Hi @Chris L.

The trees are the most expensive part of your equation. An engineer or architect with a survey can tell you where and how to build your home without too much issue. Your short cuts will be to see if the land is already it's own separate lot from the piece where the house is located? Does the land have an address assigned already? Does it have it's own tax ID and legal description? 

There's going to be a ton of money spent on site prep alone. You'll need an arborist from your municipality to tell you what trees you can or can't remove. If you can remove them all, the number and size of the trees can determine the cost. You must then have the trees hauled, the land raked for roots and then earth brought in to fill the areas where the trees were. 

You will also have to get the land access of water and sewer, as well as pay impact fees to your county. Those are also pricey.

Building is it's own separate headache. BP has articles that go over what you should buy raw land for building, that goes over price, construction and profit.  

Tom has validity, but it's quite a stretch IMO. I'm an arborist and also building a couple homes on slopes, with trees. We're talking a quarter acre here, how many trees can there be! Root removal might possibly be required, but I doubt it. And I doubt back filling.

So if I was bidding this project: a ton of big tree removals, with stump grinding, and soil backfill, on a slope to accommodate space for a 3000sqft home, $25,000 would be more than enough.

I've done tree removal projects like this before in Los Angeles, typically under $5000.

I'm not convinced there's any way this could cost more than caisson work.

@Daniel Siapin   agreed until you talk to the city or county you have no clue as to their tree ordinance.

I portlandia and were i Live in Lake Oswego they are nuts over trees but trees cannot preclude you from building in the legal foot print.. it affects us on land use IE subdividing but not infill lots.

Also negative grade homes if they are not common in an area are tough to sell.. 

in some areas Like Birmingham AL comes to mine most of the homes are either negative or positive grade.. 

the positive is you might be able to do a day light or walk out type construction and pick up some cheap heated space.

In my logging days we would have 1/4 acre slicked off in a matter of 15 minutes  LOL>

@jay hinrichs arborists are just boys in a logger's world.

You never know until you go talk to the city. You got it right Jay. Every single city is going to have its own ordinance. So these questions you'll best find out yourself talking to the city or going on it's website. The arborist that knows all these answers is going to be the most expensive one. So use the city and Google when you're confused by terms like DBH, dripline, etc., And you'll figure it out.

When dealing with grades like you're describing remember 3 things & do not develop unless you can cure them all. 

1 - Conform to your neighbors - you'll have external & functional obsolescence if you don't appear similar to your neighbors.

2 - pass the mother test. Women write the check. Men nod their head. Happy wife, happy life. The driveway & recreational area for kids is important. Women will consider this. If the driveway is difficult a buyer will pass based on the principle of substitution. They can spend the same amount & get a driveway that isn't difficult to navigate and/or recreational area for the kids to play & be safe while playing instead of falling down hills/retaining walls. 

3 - remove all roots. If you only grind stumps the roots will decay & cause sinking/erosion. This is a direct cause of foundation damage. Simply grinding stumps will work long enough to get it sold but long term will cause the buyer to spend money repairing & potentially lose money on future resales. 

You can divert water whether positive or negative grade. That's the easy part of building on a sloping parcel. Whether you make money depends on if you mediate the 3 issues I mentioned. 

I'm in Birmingham & used to appraise. I've seen many on grades built the right & wrong way. 

Consult experts before you move forward to see if it's financially feasible to buy & develop. 

If it would be on a septic system you need a perk test completed also. It may only perk in one place & destroy the ability to develop if it perks exactly where the house would have to be built. 

Originally posted by @Daniel Siapin :

@jay hinrichs arborists are just boys in a logger's world.

You never know until you go talk to the city. You got it right Jay. Every single city is going to have its own ordinance. So these questions you'll best find out yourself talking to the city or going on it's website. The arborist that knows all these answers is going to be the most expensive one. So use the city and Google when you're confused by terms like DBH, dripline, etc., And you'll figure it out.

DBH in logging is our main focus..  when I was active .. and had my bird dogs scouting timber land.. half the time they would show me a Christmas tree farm and say it had timber..   So I finally had to make a piece of rope for them  ask them to walk up to the tree

in putting the rope around it if you got to this knot and there were no limbs for about 40 feet.. give me a call LOL.  LOVED the logging business.. some of my best times ever and most profitable.. far more than any rental property.  Unless you own hundreds of doors.