Question on investment rules of thumb for residential development

[Steven Phillips]

Hi,

I am working on a residential development of 36 town homes on a 5 acre site with a land acquisition price of $350,000.  I am looking for some general rules of thumb as far as investment returns for subdividing, developing the land, and selling new construction.

For example what rules of thumb could I back into the lot purchase price with, let's say knowing we can sell a townhouse for $280,000.  I know estimates will vary widely with cost of lot development as far as road, city sewer, city water, gas, and electric hook ups.  But we are trying to narrow in on some basic back of the envelope math.