Raw Land - What would BP's do?

Question

I come to my fellow BPer's for some knowledge about a property.  Thanks much in advance to anyone taking the time to review this.

My wife and I have come into a property in NC that her parents have the deed on that is just sitting there and we're weighing our options. So as Josh usually says, let's jump right in. I know you guys like details so I'll try to provide as much as I can.

- parcel of land is .9 acres. mostly flat, few dense trees is back that can be cleared or left alone

- currently zoned for residential but we're inquiring if that can be changed

- closest town is less than 5miles away with population of approx. 16K in 2011

- located less than 2miles from small county owned joint civil/military airport. 77% general aviation, 23% military. average 60 flts per day

- adding water and sewer to property is approximately $2500.00

- median average income $35K, median house/condo value $115K, median gross rent 2009 $585

- 9.8% unemployment 2012, 2005-2009 Industries: (1st) Manufacturing: 16%, (2nd) Retail: 12%

So, what would you guys and gals do? lease some land, mobile home, SFR, storage units or just sit on it?  Our idea might be a mobile home but wanted to hear from those with much much more experience than us!  FYI, we were already told that we cannot put more than 1 mobile home on this plot due to size. Thanks again!

John

Craig E. · Answer

I would tie in water/sewer and bring the mains up/ cap off with clean out and shut off w/bib..  Bring in a power loop to a disconnect.  Grade the land.  sell!  You've done what everyone hates to do.  Infrastructure.  Building a house is the easy part.  Let a buyer now run with the "fun" part!   Repeat process.

Robert Minnella · Answer

John,

It has been my experience that once a soil test fails it is because of unsuitable soils like clay, hard-pan or a high water tables. That is not likely to change. Many states require that you install a mounded system if that is the case. They are very expensive mainly due to the cost to be in suitable fill dirt.

$2500 for a water and sewer tap on the corner of your property to tie into is a steal! You could put a used or repo mobile home on that parcel of land for really cheap. Some of these used mobile homes have been well maintained.

Some of your additional costs beyond the permits would be: mobile home set up, a/c, code steps, electric, water and sewer plumbing to the taps and perhaps a driveway, depending on whether your town requires it.

Your scenario sounds like it would be a very good investment for a rental.

To find the best contractors for these jobs, I would contact two mobile home dealerships and find out who they use for the entire project. They usually recommend their best subs.

John McCormack · Answer

@Ben Reese

@Ben R.

Thanks you both Bens! This is just the sort of information/ideas I was thinking about. I've never heard of Butler Building but upon further research I'm definitely interested in exploring our options. All of this is obviously dependent upon the zoning which we're in the process of determining.

From what I've briefly learned, Butler Buildings are just more economical ways of constructing certain stuctures, whether it be for agriculture or manufacturing/industrial. Some ideas that have just popped up in my head might be horse stabling or garage/covered storage/workshop space possibly?

The property is easily accessible via paved road:

http://goo.gl/maps/sEJ3A

We're in the process of determining utilities at location. The area is residential but 2 parcels away is a business structure on a corner lot. Again, we in the process of determining if this can be zoned business as well. We are also going to find out if it will perk as well.  Many years ago this test was done with unsuccessful results but  I've learned this can change over time.

Thanks Ben and Ben for the suggestions.

John

Ben Reese · Answer

Hi John,

What is the access to the property.  Is it on a paved road?  Are there city utilities to the property?  And is there power there as well?  How about the surrounding uses.  Is it primarily residential or mixed?

In the Carolinas a MH on an acre is a product that is in demand as there are not that many new MH's going to parks any more. And as you point out you could put an inexpensive MH on the property and rent it for a decent return, assuming of course you have access to utilities.

Ben ( Another Ben R. !)

John McCormack · Answer

@K Marie Poe

Thanks much for the clarification about the water and sewer Marie I wasn't aware of that. I will further research this to find out the real cost.

Ha, it's funny you mention selling it to a neighbor as we were actually thinking about talking to the neighbor to see if they were interested in selling us their property.  Currently, and older dilapidated home sits on their property and we're trying to determine if it is vacant at this point.

Actually, the real reason there isn't a structure on our land is that this has been in our family since 1914. To make a long story short, it was passed through from grandparents, to parents, to multiple members owning a piece. My in-laws continued to pay the taxes on this so it was signed over to them eventually. They had neither the means nor the knowledge to do anything except let it sit.

Again, we have no desire to build new construction on the parcel as you've stated, the costs don't really add up and we do not have the experience for that.

I'll mention once again to all, we're thinking of placing a mobile/manufactured home here. We own the property free and clear. We do not want to really sell it.

Should a mobile not not even be a consideration for us at this point? We believe we could get $500-$600 a month for a 3/2. Any and all advise is welcome!

Thanks much in advance!

Ben R. · Answer

Is 9 tenths big enough for storage units?. If so, I'd lean that way. Storage units seem to be big up in this neck of the woods. If it will perk and can perk, would that be cheaper than city water/sewer tie-ins?

Account Closed · Answer

Pretty sure you are way off on the water and sewer.  The city is charging you for the meter and sewer hookup, with the "taps" ending at the street.  That doesn't have anything with how you get water and sewer to the building pad. If your city installs water and sewer to the structure on large lot for $2500, that would be quite a deal

There is a reason that there isn't a building on the lot.  Building costs are up and out of whack with existing homes.  That's why you don't see new contruction in most places with low median incomes and low median home values.  If you built a 1000 square foot home at the super cheap rate of $75/sq ft, plus permits, plus water, sewer and electric and gas.  Plus hardscaping and landscaping, you likely can't sell it for a profit.

John McCormack · Answer

@Tom Goans,

Thanks for the information and time responding, much appreciated Tom! Your advice is definitely something we value.

I'm not sure we are speaking on the same level in regards to our ideas of "developing".  I'm in no way shape or form thinking about putting in condos, apartments hotels, gas stations or anything near the scale of $14 to $34 million. Also, this .9 acres is already on a main road with houses across the street, to the left and right of us and also behind us.

I'm not quite sure what you meant when you stated that I made a mistake on the water sewer cost without explaining further or offering a suggestion. I spoke to city zoning and planning and stated we'd simply like to get tapped into city water and sewer to which we were given the quote I provided, am I missing something you can shed some light on this?

I definitely agree with you on the population and unemployment numbers. Lending wouldn't be a factor really since there wouldn't be any financing.

We were thinking of putting a mobile home on the property which would be no more than $15K. Maybe I should restate the question as "We have a free and clear piece of property.

Let it sit and do nothing:

- OR put a mobile home on it and rent it?

- OR (possibly) re-zone it and put storage rental?

- OR sell the land?

Again, we're really only in the idea phase here and that is the reason we're proposing these questions on BP.  Is there any further info I can provide that would help? I can simply provide the town in North Carolina if this helps.

Thanks again.

John