Subdivision education and/or classes
Real Estate Broker · Pennsburg, PA · Member since 2014 · 47 posts · 6 votes
I am looking to get involved in sub dividing larger parcels of land into building lots. I have been educating myself with local ordinances in regards to zoning and subdivision, but know I need to be very careful and fully aware of the ins and outs of subdivision before totally diving in. I know there are many horror stories about people/groups getting in over their head with a project.
I am very much against taking high cost classes from "gurus", but in this case, is there some training out there that cuts out the BS and would be very beneficial to invest in? I am looking to get all approvals on the subdivision, and flip the project to a home builder once all approvals are in place. Is this a sound strategy in your opinions?
I appreciate any feedback any of you subdivision veterans may be able to provide. I am located in Pennsylvania......
I am looking to get involved in sub dividing larger parcels of land into building lots. I have been educating myself with local ordinances in regards to zoning and subdivision, but know I need to be very careful and fully aware of the ins and outs of subdivision before totally diving in. I know there are many horror stories about people/groups getting in over their head with a project.
I am very much against taking high cost classes from "gurus", but in this case, is there some training out there that cuts out the BS and would be very beneficial to invest in? I am looking to get all approvals on the subdivision, and flip the project to a home builder once all approvals are in place. Is this a sound strategy in your opinions?
I appreciate any feedback any of you subdivision veterans may be able to provide. I am located in Pennsylvania......
Education is the key. Land development is a very technical space and there is a lot to know and watch out for but is very rewarding and lucrative when done correctly. I have lots of info on YouTube about land development.
First step is to determine if the project will even work from a financial standpoint. Start with the end value of the buildings or lots and work backwards. You will need ball park cost estimates from site work contractors for site work, roads, installation of utility lines etc. For general infill, subdivisions and scattered lots builders can generally pay 20-25% of the value or sale price of the house for the land depending on demand and price point. This is for a finished lot ready to build. Not necessarily cleared but all roads, utilities etc ready to break ground. You can call some local production and spec builders and ask them what they can pay for lots. Usually They will tell you. After you determine the price point on the lots you work backwards form there and subtract all costs of the development and a profit margin you are happy with to determine the price you can pay for the raw land. I like a 30% margin for net profit just to be safe
Next check with the city or county to determine if you can do what you want to do and what is required for all zoning approvals and the time frame. You want to find out what the bonding requirements are, inspections, CO process, General permit fees, proffers, water/sewer tap fees and the process of setting taps and connecting, do you need to install manholes or fire hydrants. Ask if you have to install curb, gutter, sidewalks, street signs, street lighting or any other special requirements. Are there any specific street design or access requirements, DOT requirements, permits or traffic studies. DWQ, Army Corp or any other environmental requirements or permits. You also need to check with the utility companies and get cost estimates from them for availability, fees, hookup charges, transformer and power line/power pole locations or relocation requirements, water, sewer, gas, cable etc
This is just a quick high level overview of the process but will give you some things to think about and a good starting point.
Do you have any consultant companies that could perform this function for you? We have consultants here that determine feasibility and then help you navigate the local agencies to complete your project. This might be better from a liability standpoint than relying on what you can learn in a class.
@Dustin Allen I definitely wouldn't try to tackle it without a lot of assistance from consulting/engineer company. I would more be looking for strategies in flipping the land to builder/developers and analyzing from that standpoint.
I spoke with a local engineer about developing some land into smaller buildable lots. He was extremely helpful because he does it all the time. I simply explained to him what my intentions were and tried to get some rough figures (norms) just to see what all it involved. It definitely can get very expensive quickly. I would not do anything until I talked with someone with lots of experience and run the numbers several times. Obviously you want to get bids from everyone involved, but you can get ideas with a short chat.
I am looking to get involved in sub dividing larger parcels of land into building lots. I have been educating myself with local ordinances in regards to zoning and subdivision, but know I need to be very careful and fully aware of the ins and outs of subdivision before totally diving in. I know there are many horror stories about people/groups getting in over their head with a project.
I am very much against taking high cost classes from "gurus", but in this case, is there some training out there that cuts out the BS and would be very beneficial to invest in? I am looking to get all approvals on the subdivision, and flip the project to a home builder once all approvals are in place. Is this a sound strategy in your opinions?
I appreciate any feedback any of you subdivision veterans may be able to provide. I am located in Pennsylvania......
Education is the key. Land development is a very technical space and there is a lot to know and watch out for but is very rewarding and lucrative when done correctly. I have lots of info on YouTube about land development.
First step is to determine if the project will even work from a financial standpoint. Start with the end value of the buildings or lots and work backwards. You will need ball park cost estimates from site work contractors for site work, roads, installation of utility lines etc. For general infill, subdivisions and scattered lots builders can generally pay 20-25% of the value or sale price of the house for the land depending on demand and price point. This is for a finished lot ready to build. Not necessarily cleared but all roads, utilities etc ready to break ground. You can call some local production and spec builders and ask them what they can pay for lots. Usually They will tell you. After you determine the price point on the lots you work backwards form there and subtract all costs of the development and a profit margin you are happy with to determine the price you can pay for the raw land. I like a 30% margin for net profit just to be safe
Next check with the city or county to determine if you can do what you want to do and what is required for all zoning approvals and the time frame. You want to find out what the bonding requirements are, inspections, CO process, General permit fees, proffers, water/sewer tap fees and the process of setting taps and connecting, do you need to install manholes or fire hydrants. Ask if you have to install curb, gutter, sidewalks, street signs, street lighting or any other special requirements. Are there any specific street design or access requirements, DOT requirements, permits or traffic studies. DWQ, Army Corp or any other environmental requirements or permits. You also need to check with the utility companies and get cost estimates from them for availability, fees, hookup charges, transformer and power line/power pole locations or relocation requirements, water, sewer, gas, cable etc
This is just a quick high level overview of the process but will give you some things to think about and a good starting point.