Question On Outta Pocket Money Needed To Develope?
Okay, as I drive around town looking for my various deals I find a fair amount of empty lots, some big, some small, some in good areas, some in bad, and all in developed areas. But me being new to the REI game I dont have much money but I would still like to get in to the developing game. Basicaly I would like to know if mostly every thing could be finanaced? Thanks for any info.
With a presale you can finance 80% of A and D and 100 % of construction.
[addsig]
Thanks for the help, I think Im gonna look into this further and get some books on developing, thanks a lot.
Most likely unless you can afford to build multiple houses such as an entire subdivision it won't be economical for you to be a developer. That is unless your are planning on building the house yourself and have a crew.
Do not confuse developing with building. Developers are like producers of a movie. They assemble the talent and the money. They come up with the ideas and make them happen.
[addsig]
This is really interesting to me. I've found a piece of land with an anxious seller, may carry it for us. Looks like if I were the developer and paic $60K/acre for 4 acres (approx), with zoning I could build 6 homes at sale price of $325,000, cost to develop around $100k or much less.
My question is how to figure development costs: I can do the street, curb, DOT lanes. What I don't know is the cost of bringing in water, sewer, electric, etc. about 300' in from the street. Also I guess I have to think about permits?
At what point would a builder buy lots, when streets and utilities are in? What am I missing?
Thanks so much for your help . . .
Shelly in Atl
Yea, I would like to know the same kinda stuff. I would realy like opionons on good books to read for developing, I mean you cant learn all this stuff on your own.[ Edited by Jimbezy on Date 11/22/2003 ]
Guys - if it was easy it would not be so profitable.
Suggested reading:
Real Estate Development, Principles and Process; MIke Miles, Urban Land Institute.
To get an idea of the engineering costs - you will need to hire a local engineering firm. They can do a due diligence review for a few thousand dollars.
Good Luck
Gregg
[addsig]
Thanks for the info.
Thanks, what type of engineering firm (duh) should I look for, I'm aways talking with people and they say "I'm not THAT type of engineer" what's the key word to look for, land, surveying?? Would this be considered residential (I would think so) or commercial since I'm selling it commercially as a subdivision?
Anyone able to give me a quick run down of what developers need to do to get the lots ready to sell? Street, curb, water, sewer . . electric? gas, . . . how much grading do I need to do on the site, just the street and let them grade their lots for their design house?
Thinking about being the gc on thebuilding too . . . another set of issues.
thanks for any input, any stories on successful small developments?
thanks
Shelly in GA
I belive a Civil Engineer specializing in residential development would be what you are looking for.
Also interested in purchasing a lot and having some people I know who are contractors do the work as far as building a house goes. Anyone have any experience at this? Thanks.
The contractor I talked to said it cost 35K just for a Modular and a extra 20K for them to install it on the property. But there is this place called Ameri Panel that sells kits for around 28K for a 1200 SqFt 3/2, and purports that you can intall it yourself with a lil help from your friends, just as long as you contracted out the foundation and plumbing.
i just went and looked at the AmeriPanel site. It's a great idea, but be aware that it is only for the frame of the house. No doors, windows, siding , shingles, drywall, etc.
How To Be A Developer With No Money.
Lets take Bakersfield, I like it, lots of poverty ethnic mix. Lots of people moving out of LA and Orange into Bakersfield cause it is cheap and has a high foreclosure rate.
1. You buy a lot to start, just one lot. You pay as little as possible but you buy it this way.
Lot sells for $25,000 you buy it with interest payments only to begin 60 days after start of construction. You offer same interest as bank. 2%. Thats $42 a month. But the Trust Deed that the Seller took back has a subordination clause in it. "Seller Mr. Dubbs, agrees to subordinate this note and trust deed to a new note and trust deed for purposes of construction. This new note and trust deed shall not exceed $85,000.
You then do plans and permits and then go to your local bank and borrow a construction loan as above described and away you go. You build the home and you sell the home and you then go on to the next one. Only this time you do two at a time.
You must first go to the building department and check permit costs and what they require prior to constructions. Do they need a soil test? If so you need Soil Engineer. Have a sewer contractor come out and bid on sewer connection. Have a plumber come out and bid on water connection and with plan in hand bid on all plumbing. Have electrician come out bid to install power pole for power while you are building etc. etc. all this is just stuff. Go do it and when in doubt ask your contractors and of course the building department. You continue up the hill each time you start again you increase the house starts until you reach five. You sell four and keep one and that is the start of your property gathering. Copy plans and go to drafting services to obtain as they are really cheap. You cannot afford originality and goodies until you have built about 50 then get fancy.
Call me when rich. I like to have rich people to talk to. Lucius [ Edited by Lufos on Date 01/09/2004 ]
Man Lucius, you should write a book entitled "I Know more then you about Real Estate". Every post I read of yours is so full of info its all most too much for me. I am definitly going to look into this, it sounds like a brilant idea. And when Im rich you and I can talk about who has a bigger yacht. Sorry but Im gonna have to IM ya with some questions.
Thanks a lot,
James