Real Estate Development Basics

5 Replies

I am trying to build a city, and when I recently tried to acquire a permit to build on a piece of land in the US, I was told to talk to a realtor, however my project would’ve taken place over several plots of land.

Money is not really an object but the way I am trying to go about buying the land is confusing to say the least.

Would I go and buy all the plots that are going to be affected by this project, because in doing so it would invariably create little pockets of land that still belong to the government - or would it?

I've even began to wonder if eminent domain would be suitable however I don't know the legality behind that, and if that's even available for use in the private sector.

If anyone can help that’d be greatly appreciated

- SRF

@Shawn Fyffe That's quite an ambitious plan. I can't say that I can tell you how to go about building a city. Maybe if you gave me a little bit more information I could help you. I am a licensed Realtor and General Contractor in the State of CA. I've been part of a business that has developed subdivisions, office parks, office/retail condos and single family residential homes. 

As for Eminent Domain, that is a process the government uses to take land from private property owners, and is usually used for roads, rights of way for utilities, etc. In some states they do use it if a new use would create a higher tax base than the current use, however; it is extremely difficult to do that. 

What state are you in? How much land is it that you are trying to buy? Do you know what the current zoning is, and what it would need to be to fit your use? That's a good starting point. Exactly what is it you want to do? 

Originally posted by @Shawn Fyffe :

I am trying to build a city, and when I recently tried to acquire a permit to build on a piece of land in the US, I was told to talk to a realtor, however my project would’ve taken place over several plots of land.

Money is not really an object but the way I am trying to go about buying the land is confusing to say the least.

Would I go and buy all the plots that are going to be affected by this project, because in doing so it would invariably create little pockets of land that still belong to the government - or would it?

I’ve even began to wonder if eminent domain would be suitable however I don’t know the legality behind that, and if that’s even available for use in the private sector.

If anyone can help that’d be greatly appreciated

- SRF

There are a lot of variables here and a whole lot to know. One thing is you do not want to buy the property until you get all of the entitlements which are the approvals and permits. I wrote a blog post about it here 

https://www.biggerpockets.com/...

 

@Shawn Fyffe From my understanding, Eminent Domain is only used when government is taking possession from private owners. The key component of that, is to show what you are developing has greater benefit to the public than the existing situation. It can be income generation to the government, parks being provided to existing community, or highway that will bring in more traffic through the city...etc. In anycase, it's on the developer to prove the benefit to be far greater. Which means, A LOT OF STUDIES hence money and time.


Robert

@Robert Chuang

Well, who decides whether or not the opportunity cost of development project will prove to be more beneficiary juxtaposed to what is already there?

The same board in which distributes construction permits or is that delegated further up the chain? Would the verdict be chosen for the mass by a few or by the populus as a whole? 

Invariably this would change state to state.

It is a huge step you are taking here, there are a lot of variables that need to be considered. If you look to buy all the required surrounding land in one go there may be some legal and government issues you may encounter. The Real Estate Market is a very complex yet simple business that needs to be done right.

Some additional info can be useful to give you a better perspective