I have done a few fix it and flip it homes. But I am intrigued by the whole developing land thing. I just cant seem to get the basic process straight in my head. I have found a niche that needs to be filled and I have found the land to do it. Is the process like this? Let me know what options are better.
I like to do as much as possible not using my own money.
Offer to buy the land to the owner(owner financing) over 10 years.
requireing 20% down.
Hire a architect to draw up the plans for the development. Requireing whatever he/she charges.
Find a builder. NOW What??? How much money will I need to get the construction loan to pay for the builder? If I pre-lease the property, will the bank require less money down for the construction loan?? Should I find a way to take the builder on as a partner lowering my expenses?
Im new, help me out.
Thanks!
It depends on where you are. You will have to get the land subdivided, you will have to put in utilities and streets, you may have to get proper zoning.
The land is on a main hwy and is only 3 acres—I’m starting small. I’m trying to figure out the best way financialy to go from vision: Plans in hand from architect, to completion.
You should buy contingent on getting all approvals necessary – such as subdivision, land development, utility. Your offer should also have a contingency for an upfront due diligence/feasibility period. You don’t want to have to close with the seller until you have everything you need. You’re going to need an engineer/surveyor to collect data about the site and prepare plans to submit to the municipality. You need to have a RE attorney experienced in representing developers.
