All Forum Posts by: Eric Teran

@Gregory Cudzilo that sounds like a great plan. I’ve bought land twice and designed a house for a client who owned land in WV near a mountain resort. If you are looking to buy 15-20 acres you probably is not have a lot to worry about in terms of setbacks, lot area, and so on that a typical lot would have in the suburbs or city.

The biggest item is if there are any easements. There can even be an easement for a bird corridor. There may also be certain areas that may be protected for the wildlife, aquifer, protected fauna and so on. Think nature and what might be protected. Verify if the piece of land is still useable if any of these items are relevant.

Lastly, where on those acres is the house going to be situated. The farther you go from the main road the more expensive it will cost to build and maintain access to it. How about utilities? I assume septic, maybe solar power or generator, well water? If not how do they get to the house? That can kill a budget. Good Luck.

@Alex V. My wife and I found vacant land in Alexandria in 2015 and probably overpaid. We built the house in 2017 and like you are planning to do I acted as the GC. I am also an Architect so I was able to do our plans saving additional money. If this was a spec house we would have lost money. However, it is our primary residence. Three years later it is appraising for almost $800k and it cost us $630k to build and for the land. If you are planning on staying for a few years I wouldn’t worry too much about it.

As far as permits and building there is a lot that goes into new construction. The biggest factors are utilities that cost a lot to put in place and grading/exporting dirt. I also have a client right now near BWI and we have to get additional approvals from the airport authority. Most planning or zoning department have a pre-design meeting where they can walk you through the city process if you don’t know it already.

If you have detailed questions about new construction let me know and I will see if I can help you out. Good luck.

@Ross Sib is this for a new complex or a remodel? Is there existing utilities or all new? The $45k is probably in the middle. You can find lower but you want to be careful on how much experience they have. The Structural and MEP engineers are usually a third to half the price of the Architect. It depends how complicated the building is. If it is new construction on a vacant lot you will need a civil engineer and they are expensive. They can be another $25k.

I provide designs and plans for a design studio in Southern California for a former colleague who now has his own company. PM if you want to talk about your project further. Good Luck.

@Ben Smith I really like my CPA, his name is Jason Osser. He is based in Alexandria, Virginia but he helps me with my rental properties in Virginia and a few in Ecuador, South America. He knows his stuff and spends time with me going over different scenarios. PM me if you want his contact information. If not google should work. Good Luck.

@Paul Sandhu I'm lucky right now. If this lasts for a few months I don't know if my new guests will be able to foot the bill if they have to keep extending their stay. I'm also not making as much as before but it is something which is better than nothing. 

@Robert Johnson II Ecuador is a great place! They use the dollar so it makes it easy. However, some items are expensive. Mainly the items that are imported. Everything local is cheap. Send me a DM if you have any questions.

I own two STR in Quito, Ecuador and one in my basement where I live in Alexandria, VA. Like everyone else I had two days where I had 8 cancellations. My heart sunk and I knew it was going to be tough.

However, two weeks later my two STR in Ecuador are occupied and my Alexandria one would have been as well. We decided against renting our basement since we decided to shelter in place and realized we could not control those demands if we rented the basement. However before this decision was made we received three inquiries in one day for 3-4 weeks stays.

As for Ecuador, they are being occupied by tourist who have been stranded there because the airports have been closed. They are also staying multiple weeks.

Reservations for a few days or the weekend will not come back until this dies down. Which may be months. However medium stays of greater than 2-3 weeks may happen. I am sure this will vary depending the region and circumstance but all is not lost. Yet.

Good Luck.

@Christopher Aguilera contacting zoning as @Greg Dickerson mentioned is your first step. However, they will not tell you what can be built. They will tell you the restrictions. Once you understand the restrictions then it becomes a puzzle until you find the right design to maximize the square footage of the building. If you are in a big city or county most likely most of the zoning information may be found online.

First find out the zone. Then ask the following restrictions, setbacks (front, side, rear), height (does the penthouse count?), FAR (floor area ratio which is the max SF for the lot), lot occupancy (how much area can the building take up on the lot), green area ratio or pervious surfaces (a lot of places now require soft scale or where water can collect and not drain to the storm drain), parking requirement per unit (can the parking be offset if near public transportation), affordable housing, any view corridors to preserve, is it a historical neighborhood, minimum size per unit, and any public enhancements required? This may be overkill but if you don’t ask all these questions (I have experienced all of these at least once in various projects) it may ruin your profit.

Once you are done with zoning you need to go to the building department. The two big question for me is if you go over three floors do they require something other than wood frame construction. The second is in theory you can add 10 more units. That will require a much bigger water meter, water lateral and sewer. How much do those cost to upsize? For example in DC one of my clients had an existing 3/4” meter and had to go to a 1.5” meter. He had to pay $10k. These items can kill all your profit.

Good Luck.

@Barry Ruby that was great information. To add to all this information remember that you will have to pay for this all out of pocket. A bank will not lend you the money to prepare the plans. They wait until there is a building permit. Going through a variance, hearings, designs, building permit and so on will cost a lot of money. As I mentioned before the biggest factor from what you have stated is getting the variance to subdivide. I would make sure that once subdivided you can build what you need to make a profit. 

@Scott Savard If the town has already denied subdivisions then this will be extremely complicated. You need to find out why. Was it the town, the neighbors, or both. If these are all one-acre lots with small homes then most of the neighbors will probably want to keep it that way. I've walked neighborhoods before and would talk to the people who were outside and find out the history. Twice that lead me to forget about a lot for good. Call the zoning and planning department and see how far off the requirements two lots would be. For example, a lot has to adhere to a certain size and usually street frontage. If the minimum lot is 20k square feet and you propose one lot at 20k SF and the second at 18k SF then you are not that far off and can state that the character of the neighborhood remains intact. If they are both under 10k then you are changing the so-called character. That is the first part. Figure out how far of the subdivided lots will be from the required minimum. Also, call the people on the board who will vote for a variance and get their stance on subdivisions. If there are 5 board members and they all say they are 100% against variance for subdivisions then you have your answer. 

The second part is finding out from the zoning department what you can build on a lot. First, find out what zone it is located in. Most cities and counties have this information online now. That will tell you the setbacks, height limits, open space, green space, impervious space, lot occupancy, and other requirements (usually found online as well). Usually, it is a combination of those and not all of them for residential construction. Before buying the land you should know how big you can build and see if that works for your numbers. 

If you have time I would go to the zoning/planning/building departments and tell them your plan and ask for assistance. Usually, they are very helpful. Especially for beginners who they think are not trying to take advantage of the situation. Also, find out how long a subdivision normally takes and you can work that into the agreement. 

Another question, are you looking to build two homes and sell or rent them? If you are renting them maybe you can build the main house and an accessory structure that is smaller but could still be rented out.