I am interested in how you get “started” in real estate development. I’m a licensed agent, have a decent network and a few leads on some land that I’m interested in developing.
My question is, with all the moving parts: financing, permits, zoning, platting, building - how would you start thinking about and making sure all of the costs are taken care of and you’re not missing anything? I’d enjoy speaking with someone who’s done a land development project successfully and how they “vetted” the deal.
Any insight or advice would be greatly appreciated, I can send more details of the projects as well.
*I have not successfully completed a land development deal, but am also interested in land development.
I've heard the trick with land development is getting the right Land at the right price - 10% being a good target to shoot for.
I've also met with a developer who said he looks to "double" on every deal - meaning he is spending 200k for land/permits/materials/labor and targets a 400K sales price
In my area, 4 units+ is the trigger point for all sorts of additional complicated planning reviews and requirements, curbs/gutters, traffic studies, environmental reviews, etc... so a triplex/duplex only requires the same review as a Single Family home.
So, I'm just building an excel spreadsheet with best/worst case budget #'s for each step in the process, get an approved set of plans and then I'm going to shop it to 3-4 builders I already like in my area.
I might just have them do foundation/framing/mechanicals/etc... and I'll finish it off with drywall, paint, tile, cabinets, etc...
@David Jarvi do you have investors who are putting up the capital needed, or funding some other way?
funding with my own funds, but only paid 20k for the lot (4 unit lot) and plan to pay about 200-300K in building costs.
I might just sit on it for 10 yrs as well... if I get 2K appreciation a year thats a 10% return.
I also am intrigued on doing what indian tribes do - 50-99 yr long term lease on the land.
as I probably could get $2000 a yr for the rest of my life.
Your biggest hurdle will be a builder, then the permits. It's expensive more so in KC.... and you're probably going to find out you need an established relationship to make this happen. So many of the good builders are backlogged they won't take this on or if they do you're paying for it.