Case Study: Analyzing a Land Purchase for Development

Investing in land for new development can be a great opportunity—but only if you understand the zoning, legal restrictions, and development potential before you buy. In this case study, we analyze a recent land purchase in Noble Village, Westerville, Ohio, where an investor bought a parcel for $70,000. Unfortunately, due diligence was lacking, leading to potential hurdles in making the land buildable.

Initial Review: What the Investor Missed

The land in question was labeled "Reserve B" in the subdivision plat, a designation that typically sets land aside for future development. However, our research showed:

• Zoning: The land was in an LR2 (Limited Residential 2) zone, meaning it was intended for single-family homes with restrictions in place.
• Subdivision Plat: This specific lot was originally reserved for a future roadway connection, dependent on how the neighboring land to the north was developed.
• Neighboring Development: Instead of single-family homes, the land to the north was developed as apartments. That means the reserve may be eligible for single-family home construction, but not necessarily a multifamily build like a triplex or duplex.
• Declarations & Restrictions: The subdivision has a 60-page recorded declaration outlining strict land-use guidelines, HOA regulations, and architectural design approvals.

What This Means for the Investor

The investor now faces two options:

1. Build a single-family home: The simplest path forward is to apply for a permit to construct a single-family residence that aligns with subdivision restrictions. Permitting could be secured in 30 days, with estimated costs of $3K–$5K.
2. Fight for multifamily approval: To build a duplex or triplex, the investor would need to challenge zoning restrictions, attend board meetings, and possibly spend $7,500+ on entitlement processes—with no guarantee of success.
   
   
   
   

Lessons for Future Investors

1. Check zoning and subdivision plats before purchasing land.
2. Review all recorded restrictions and declarations.
3. Confirm the lot’s legal status—common area vs. buildable lot.
4. Assess market comps and land values before making an offer.
   
5. Consider hiring a real estate attorney or an experienced zoning consultant.
   
   

This case highlights the importance of due diligence in land investing. While this investor may still turn the property into a valuable asset, knowing these factors before buying would have saved time, money, and headaches.

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