How to prepare a large piece of land for subdivision

Question

Hi BP community! I am looking to acquire a very large parcel of land, approx 100 acres. It is currently zoned as R-3 and I’m thinking of subdividing into 50, 2 acre lots for SFR’s. Wondering what experiences others have had has far as selling lots to builders and what I might need to do ahead of time? (Sewer access, water lines, pave a roadway etc) I’m assuming I’ll be going to the town as well for permits and approvals, any other steps there I should take to make this happen? Thanks!

Jay Hinrichs · Answer

it would be rare in the extreme that you would run a sewer system though what your describing those would be septics.

AS well it could easily be well and septic..

as others have said you need to back into it.. whats a 2 acre parcel that is buildable worth.. given that you also have to add septic system and maybe a well.

give U an idea I am developing 30 lots in Oregon right NOW.. moving dirt.. and my cost are for full blown sewer water storm paved roads ADA ramps street lights franchise utls ext ext right at about 60k per lot.. not including the price of the dirt.. my lots are worth 140k each when I do all this I paid 50k a lot ra.. so the delta is 40k per lot and then I build the homes and make another 60k per lot on the vertical.. this is phase one of 3 phases 89 lots in total.. we paid cash 5.2 million for it. then got bank loans for the horizontal and will get bank for the vertical.. this will require about 40 million in debt and make us about 10 million net over 2.5 years.. that's how U back into development.

Now the other aspect is zoning and approvals like others above are talking about.. you start by walking into your county if its county. or City if its city and talking to the planning department start there. then move backwards on the above.

development is a big money endeavor with tons of risk. but tons of reward if you hit it right and have access to lots of capital.

Clint Shelley · Answer

Jay's right. Development is a big fish arena but possible especially if you have the dirt already. Several of my clients and me for that matter do the poorman's version. We find parcels with some lengthy road frontage in the rural areas, preferably with lighter zoning. 1.5 to 3 acre farmette lots good for septic tanks, but county or city water at the road. Makes for an easy development and usually not too long to hold.

Another play is to find some land that would make a good sub, get it a a good deal, and get the zoning and permitting ready, and then flip. Problem is as a newb, if you've found it, it's probably already been passed over by the sharks.😁

Clint

Another play is to find some land that would make a good sub, get it a a good deal, and get the zoning and permitting ready, and then flip. Problem is as a newb, if you've found it, it's probably already been passed over by the sharks.😁

Clint

Clint Shelley · Answer

You need to figure out the lot size and it's market rate and back out your costs from there. Number 1 can you develop a 50 lot sub in that location? 2 Are they going to be on septic or sewer? 3 How many linear feet of pavement will you put down? Start there and see if it's worth figuring out the rest. Most plans fall apart at the sewer and pavement costs. Good luck.

Clint

Greg Dickerson · Answer

You first need to make sure there is demand for product in that area. You can talk to local and regional production builders to gauge their appetite and opinions about the market and potential of the area.

They will also telL you what they are able to pay for lots in that location as well.

Clint Shelley · Answer

Jay,

What are you guys paying for asphalt for your subs? For comparison, here in SE Alabama, it's running 375 a linear foot. I'm working on one 200 lot with a mile of pavement plus 2 cul-de-sacs and am designing another 60 to 80 lot depending on where we run the storm water.

Clint

John Teachout · Answer

Your community should have a master plan, zoning plan or some such "map" which is probably posted on a wall in someone's office. First step would be to inquire whether a development like you're envisioning would be allowed? If the area you want to subdivide is already "zoned" for that, it should be relatively easy to get permission.

Keep in mind that some communities have impact fees which can greatly add to development costs. Just getting into your local government office(s) and chatting with the appropriate personnel should help a lot with moving forward.

If public water/sewer is available that should help. If you build it, will they come?

Clint Shelley · Answer

You'll be better off partnering with a trustworthy, experienced builder/developer so you can recoup some money from the houses themselves. There is so much to learn it's too much to type here.

Clint

How to prepare a large piece of land for subdivision

How to prepare a large piece of land for subdivision

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