Read on for every step you need to make profitable land deals.
Up Front Feasibility
Leverage technology to perform due diligence from a distance. You can examine important key features such as: zoning, topography, developable area, wetlands, flood zones, utilities, including water and sewer mains, electric transmission or gas lines, etc.
Review site constraints like right of way, easements, encroachments, any physical improvements.
What are the local entities that have jurisdiction over the property?
Check for deal complicating invisible risks like tax liens or title issues
Review accessibility to utilities like water and sewer
Have perc tests been completed?
What environmental assessments are needed?
What are the local government approval processes and procedures?
You should have the end in mind before putting a property under contract. Be certain to have a firm concept of your intended use for the property.
Have multiple exit strategies, in case your top strategy falls through.
Establish your contract phase go / no-go decision criteria and stick to them.
As you complete your up-front feasibility, you’ll determine what permissible uses and densities are allowed by zoning, and thus, can predict the fair market property value. You can then determine what purchase price you’re willing to pay.
Armed with the results of due diligence study, you can prepare cost estimates for development costs, based on your exit strategy.
Does the deal pencil out? Based on your plan, you can prepare the expected sell price and prepare an executable plan of action.
Evaluate whether you need investors or other financing to support your financial needs.
Based on your vision of the property, you should have a Conceptual Plan prepared, to discuss approval requirements with jurisdiction staff prior to commencing any design efforts.
Required adjustments to the Conceptual Plan will form the basis for the final Site Plan, which can then be used for construction permitting.
If your desired use is not permitted by the current zoning, special permits, special exceptions, or rezoning may be required. The time and costs to obtain such Zoning actions can be significant and must be considered.
Based on intended use, permitting jurisdictions will require sets of design plans. These plans must address required demolition, erosion & sediment control design, site layout and transportation access, grading, utility-service design, storm-drainage treatment and storm-water management design which must all successfully endure agency review prior to obtaining a permit.
For multi-lot developments, subdivision may be required to allow for individual lot sales. Subdivision requires an associated Subdivision Plat which must be prepared and approved, and then recorded with the jurisdiction land records.
Permitting and platting can be time-consuming processes, which time must be considered as part of the exit strategy.
Understanding the approval process will help determine your plan for the property.
You’ll need to know local jurisdiction requirements and approval processes.