What are the steps for subdividing?

Question

We are looking at a 19 acre plot of land with a house on it. We would like to puchase the land which is in 2 tracts being sold together at an auction. There is a 1 acre trac with the house and an 18 acre trac with a beautiful area to build surrounded by mostly timber. Our goal is to rehab the house and sell it with the 1 acre then subdivide the other 18 keeping about 10 to build a house for ourselves, 1 to build a spec house and divide the rest into in a couple lots that range from 1-3 acres.

What are the steps we need to take in order to subdivide? The property is located about 2 miles outside of the city limits. I know the land has to be surveyed, a road will have to be put in (unless we can get permission to use a driveway already in place). Are there any permits we need? We want to have the details worked out before we bid on the house in order to know high to bid.

Thanks!

Wayne Brooks · Answer

Jodi Melssen While local, behind the scenes knowledge is great, don't believe everything the neighbors say.  They can be sincere, but misinformed.

Jodi M. · Answer

Wayne Brooks Thanks, I won't believe everything he said. I actually only e-mailed him because he is a member of the same local real estate club I joined and I'm pretty sure that's the only reason he called me back. He gave me some background history of the land (he's lived there 30+years) but other than that mostly told me to research carefully.

Jon Holdman · Answer

I posted some info in your other thread:

http://www.biggerpockets.com/forums/44/topics/85896-1st-subdivision--regulations-for-creating-a-small-country-developement

Jodi M. · Answer

Thanks for all the ideas! The propery is within 2 miles of the city limits so I've contacted the county use admistrator and the city zoneing department. I have also contacted my real estate atterney, the title and escrow guy I've worked with and the neighboring property owner. My next stop is going to be the courthouse.

I've found out the driveway going into the 4 houses was sold at a tax sale and is owned by someone who doesn't live there or maintain it. There are also more houses than that road is supposed to serve by current standards. That lane goes across another property owners land (the neighbor I called) so access could be a problem. The road through the rest of the area is owned by a subdivision and according to the neighbor houses can't be built off of that. (that eliminates 1 access route)

I'm tryig now to find out if houses(even 1 more) can be built here and if there is access or I have to get a neighbor to agree to access. I also have to find out what kind of regulations for roads/drainage etc will be required to find out if it's worth doing. Acording the county we would not need to subdivide to put up 1 more house because it's a seperate plot but anything else would require subdividing.
I knew subdividing wouldn't be easy and requires a lot of planning but with the property lines it's a mess out there! I meet with the county use guy this week with our potential plans. Hopefully he can give us some answers.

The county guy told me to do a lot of research because someone who hasn't is going to be surprised when they buy it. I've had a couple people tell me they think the auction company and sellers are trying to hide somethings (or just neglect to tell).

Any specific questions I should ask him?I'm working on my real estate license so I guess even if we don't buy it this will be a good learning experience :)

Thanks for the ideas!

Jon Klaus · Answer

Subdividing adds value.  It's a great strategy in some situations.  Good tips above.

Kelly N. · Answer

Steve K is right, and I don't think your plan is crazy at all.  Sounds wonderful to me.  Good luck!

Will Barnard · Answer

Aside from that, an environmental report, survey, and possibly a highest and best use report. Speak with a local civil engineer too. That should get you started.

Steve K · Answer

Contact your local planning and zoning department as a starting point.  What they require will determine whether you'll need to find yourself a civil engineer and a real estate attorney.

Jodi M. · Answer

Kelly N. Which department do I need to call to get that information? There have been several subdivisions that have gone up in this area and I agree that mostly the big developers do it although the subdivision we built in and currently live in was developed on old cattle pasture ground by a local farmer.

The main reason we are considering this option is because we want to keep the back 10-12 acres (a good building spot and hunting timber). I know this might sound crazy as an investor but other than the spec house our goal isn't really to make a lot of money off this subdivision, it is to make enough to pay for the expenses and initial land so we will have gotten our 10-12 acres paid off for.

Kelly N. · Answer

Hi Jodi-

I think you'll have to talk to the municipality where the property is.  It will vary greatly from place to place.  I know ours is a little less strict than most, but don't like 'flag lots' (where there is a LONG narrow driveway opening up to a parcel of land), they have certain size requirements and frontage requirements, plus set backs from roads that must be followed.  From what I have seen, it is quite a lengthy process getting a variance for these issues, so only the big developers do it.  So, I would find out what they allow and how much it costs to divide, formulate your plan from those numbers.  If you find out after your purchase that they will allow more, great, but if you think you can do something and find out after you buy that you can't, you are stuck!

Hope that helps,
Kelly

What are the steps for subdividing?

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