Purchasing lots to build on, what should we look out for?

Question

We're buying up a few acres throughout Michigan, based on location and potential future developments.

Someone said that if we buy a lot and break it up into 5 potential new build homes, that would then be considered a subdivision.

My question is, is there anything to look out for or consider when purchasing lots?

We will also be building our home on one of the lots. Looking to connect with an investor-focused real estate agent.

Dylan Tanaka · Answer

@Andrea Descargar I sent you a DM.

Andrew Moore · Answer

There are a number of things you will want to consider before purchasing a property. Most of these items can be determined during the due diligence phase of the transaction.

1. Verify the zoning/land use - if you are buying vacant land, and it isn't already zoned residential, I would make sure you (or your agent) are touching base with the township to verify that there is a good chance it can be rezoned. If there are other developments adjacent to the property, there is a good chance you could be able to rezone it. If not, and say it is next to industrial (or some other type of zoning that isn't residential), it may be a bit trickier to get the municipalities approval.

2. The minimum lot size requirements, setbacks, & how many splits may be available - This will be in whatever the municipality it is zoning ordinance & is usually available online. This will determine how many units you are able to develop. You would hate to purchase it thinking you can build them on .5 acres, just to find out they must be 1 acre, and now you are developing half the number you thought you could.

3. Is the land actually buildable - You will need to do a perc test (possibly some environmental testing). This will help you determine what parts of the land are able to be built on. If 30% of the initial parcel can't be built on, it is going to determine where you may be able to build on that lot.

I'm happy to be a resource for you should you have any further questions! Best of luck to you!

Eliott Elias · Answer

Make sure there are adequate utilities that connect into your lot. If your plan is to market that 10 homes can be built make sure the water and wastewater connection sizes support that. Developers will catch this during the feasibility stage and it is an added cost to them to have the city upsize their utilities. Check for floodplain and easements that may prohibit development as well.

Purchasing lots to build on, what should we look out for?

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