Development is something that scares off a lot of great real estate investors because of the unknowns and the complexity of the different phases. It is not something to be entered into lightly since it is complex, but if your hire the right professionals, it is definitely doable and the upside is much higher than what you see with purchasing a house that is already constructed, not to mention the ability to tailor the home to your desired buyer or renter profile. I hope that it can inspire some of you to develop!

Here are the phases:

1. Project Planning - This is the first step of your project and consists of you choosing what house you want and what area you want to build in. This is a good time to start bringing a team of professionals on board to help keep your project cost effective, completed to the proper codes and standards and completed in the shortest time possible.

2. Research & Feasibility - This is where you find out if you can build what you want, where you want. There are many factors on a property that will determine where you can place your house. These include things like: jurisdictional codes, wetlands, soil analysis, building setbacks, slope assessment, sewer/septic placement, water, power, driveway access, etc. a civil engineer can provide most of this information. However, if critical areas exist on the site (steep slopes, wetlands, etc.), additional support may be needed from consultants like a geotechnical engineer or wetland biologist.

3. Site Planning - A drawing that shows the location and orientation of all structures, outbuildings, parking areas, driveways, septic system, well, and any other required features on the site. This drawing is produced taking into account the information from phase 2 and includes all relevant setbacks for your jurisdiction, zoning, general site dimensions, neighboring properties, street names and other required information as noted by the local jurisdiction.

4. Project Design - Project design is a collaborative phase between the professionals that you have hired. Each of these team members will be designing their individual pieces and communicating on the overlapping areas to help ensure your entire project is what you want, it meets code and works well together. Deliverables of this phase typically include plan sets and/or calculations and reports.

5. Permitting & Red-lines - In this phase completed designs are submitted to the jurisdiction for review. Submittals can be done by your engineer, the owner’s architect, the owner, or another third-party consultant. A typical submittal package includes the plans, reports, and, calculations from phase 4 as well as any necessary intake forms. Once reviewed, the jurisdiction will send a response letter and redline comments on the design. Comments often vary widely as design is not always prescriptive and different interpretations of the code exist. Comments during this phase are discussed with the client and an updated set of documents is completed and resubmitted. This can take one or more rounds depending on the jurisdiction and complexity of the design.

6. Construction - During the construction phase, while your project is being built, your design team may need to provide responses to contractor questions and/or jurisdictional inspector inquiries. Your design team is an important resource during this phase and can help to facilitate a smooth building phase.

7. Project Close - Congratulations! Your new dream home is now complete! In this final stage, all team members helping to ensure your home was built safe and to jurisdictional code give final sign off.

Who has gone through this before and where did you find your toughest challenges?


Zachary A Pesicka, PE, PMP