Help!Purchasing 2-20 acres to subdivide into multiple resid. lots

5 Replies

I am working with an investor(family member) & partner(friend/RE Agent who owns 15 rental properties, flipped apprx 20 properties over the last 3 years with partners). 

We are all bringing $ to the table (collectively $130k) 45/45/10 split

Our goal is to purchase 2-20 acres subdivide into 1acre residential lots and build spec homes.

We've looked at 20 acres ($200k) in Terrell, Kaufman, County, TX and 6 acres ($160k) in Princeton, Collin County, TX. Both owners will entertain carrying note for 24-48 months. Both land sites have utililities (electric/water)

What questions should I ask the city/county when I call to inquire about zoning and r-plotting? Trying to do some of the leg work without bothering my partner.

All advice and guidance is greatly appreciated!

About Me:

1998-Purchased first property @ 18yo(currently owner financing)
2001-2nd house in 01' @ 21yo - sold in 2016
2009 purchased incomplete construction home for $70k & sold in 16' for $170k
2016 Built 2300 sqft home built (used builder)
2017/18 flipped a mobile home ($65k invest/$120k Sale)
2019 First wholesale deal $10k payday

@Fernando Ramirez

There is plenty to consider here, I’ll just try to hit a few highlights.

Are these parcels inside the city limits? Or in the county? If in the county, Check to see if they are within the ETJ of the nearest city. Get a hold of the county subdivision regulations and read them.

Make sure you have enough road frontage for each lot, which depends on the size of the lots and you are platting.

Are you building any roads? This gets very expensive, especially in the city, but even county spec can run $200 per foot.

Check if waterlines are large enough to serve the homes you plan to build, check with the water company or co-op. They might want you to make a development application, but the first thing you need to know is are the current lines big enough?

What size homes are you planning to build and what do you think you can sell them for?

Jon (from the Terrell DPS renewing my DL at the moment)

@Fernando Ramirez you need to ask the city what is required for all approvals and time frame, if you have to install curb, gutter, sidewalks, street signs, street lighting, any specific street design requirements, DOT requirements or permits, DWQ requirements or permits, permit fees, proffers, water/sewer tap fees and process, bonding requirements, inspections and CO process. Your civil engineer will handle all of this but it's good for you to know exactly what's required.

You also need to check with the utility companies and get cost estimates from them for fees, hookup charges, transformer locations etc. Again engineer will also gather this info but the more you know up front the less leg work they have to do which means less fees.

You will need cost estimates from site work contractors for sitework, roads, installation of utility lines etc.

With seller financing you want to negotiate a lot release schedule so they get paid a certain amount for each lot that sells vs a timeframe with interest.

This is just a high level overview but should be enough to get you started.

Are these parcels inside the city limits? Or in the county? COUNTY
Are you building any roads? WOULD HAVE TO ON 2O ACRE PARCEL
What size homes are you planning to build and what do you think you can sell them for? 1800-2400 SQFT, $150/SQFT 

Jon (from the Terrell DPS renewing my DL at the moment) HA!

@Jon&Greg. Great advice, I will get started on this.

Thanks