Rehab or replace? How to start redeveloping land.

10 Replies

People always talk about rehab and rent or flip. What about replacing a property. I listened to a podcast about real estate development, now all I see are the properties that I can replace. Old mobile homes, barely standing stick builds, and empty land. 

What are some good resources to learn this model of real estate? old podcasts, books that are recommended, people or groups to join? 

I am working on developing raw land. Pursuing both building and just creating ready to build lots. But also trying to find more information and people doing the same thing. Looking forward to other comments. 

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Hey Scott, 

I have 35 acres of farmland that was used to grow grass for cattle. I am looking to keep current zoning and not deal with the headache as I learn, so looking for 7)  5-acre lots bring a country road, power, and fiber. Owner has around 175 more acres of land. Hoping to bring to market next summer. 

@Scott Bell Op - are you talking about scraping the old off and building new, or developing raw ground? Both? 

There's not much content here and the guys in my town that have the brain capital ain't talking much. I've completed a 32 lot development which was distressed and abandoned and done some build to rents. There's a few people who have here from what I gather, but they don't seem to hang out here. I've been also searching for some good resources on this too. Maybe @Cameron Skinner will stop by and say hello. He was on a great podcast here (on build to rents) - link below and is incredibly sharp. 

@Cordell Critchell In @David Krulac 's book, he mentions some great tips about developing rural ground, like trying to use the existing roads, instead of paving your own in order to save money while splitting the land. You might check that out. 

If you find some other good sources of info, please share it here. Good luck with your projects.

Ed

BiggerPockets Podcast 168: Building Hundreds of Homes to Sell or Rent with Cameron Skinner

Thanks so much for the info @Ed O. I will certainly check that out. I will keep posting to this thread and maybe this can become a small source of information on the topic. 

What type of project did you develop? All in Montana? 

Something to understand with 'development' is it is very regional, and therefor difficult to provide good meaningful advice that translates nationwide. For example I work as a site Civil in So Cal, and if I showed you a urban in-fill lot that could be split into two it could cost ~50K and take around 2 years total. My Mom lives in Central FL and completed a lot split for the first time by herself for ~1,500 and it took less than 6 months. The process is also radically different, one requires mapping tied to GPS coordinate systems the other allows for a simple deed described subdivision. 

So the best advice as an engineer who does this for a living, is for land development pick a place generally where you might want to do this. Then go online and find that areas municipal code and start reading through it. You're not trying to be an expert, just looking to understand what it says about lot sizes, zones, requirements etc. Then pick a parcel any parcel and just start 'applying' those criteria. This will help you start to see how these criteria impact what your site can actually support, so when you actually pursue a project site and you get an engineer involved you aren't surprised by what he tells you can be designed for that property. 

If you're more interested in the in-fill scenario, maybe buying an old manufactured home on land and building a new spec home, then it's less the development issues above and more construction costs etc. So in that case you really need to either find a GC who could build for you, or understand what it would take for you to manage a construction project yourself.

Nice @Ed O. work. What where the parameters of the 32? How big was the original lot, purchase price, and sale price of the lots? Did you run into any problems? How long did it take from time of closing to sell the 32? 

What size are you looking at getting now? 

My husband and I do "development" (we call them spec homes) on in-fill lots in a metropolitan area. Happy to answer any questions you might have. Feel free to DM me if that's the route you're interested in taking. Can't offer much in the way of suburban or rural land development, but there seem to be others who've already responded who might be able to help you with that. 

@Scott Bell , if you have not, great books to read are:

• Rich Dad, Poor Dad

• The Millionaire Next Door

• Cash Flow Quadrant

• Tax Free Wealth

• Set For Life

• Rental Property Investing

• The Millionaire Real Estate Investor

• The REAL Book of Real Estate

• So Good They Can’t Ignore You

You are more than welcome to reach out if you have any questions.

Good Luck and go make it happen!