Subdivision process: worth it?

[Shane Crockett]

Looking at land in Washington that is 2x more than I originally budgeted for and thus would require additional capital/investors, but could also mean opportunity to subdivide and build 4-5x the number of homes originally planned. The math certainly works out but it doesn’t include the elevated risks, subdivision process , etc, so I’m wondering if any experienced developers or investors have feedback or guidance they’d be willing to share.

[Greg Dickerson]

Originally posted by @Shane Crockett:

Looking at land in Washington that is 2x more than I originally budgeted for and thus would require additional capital/investors, but could also mean opportunity to subdivide and build 4-5x the number of homes originally planned. The math certainly works out but it doesn’t include the elevated risks, subdivision process , etc, so I’m wondering if any experienced developers or investors have feedback or guidance they’d be willing to share.

It really boils down to the numbers. The deal either works or it doesn't. You mitigate risk by knowing the numbers, time frames and demand prior to closing and beginning the process. Land development is very straight forward and easy to cost out so you should be able to nail the numbers.