Buying land to build custom home - what to look out for?

[Ismail Humet]

Hi, I'm considering buying a lot of land in NJ to build a custom home on for my family.

I've never purchased land lots before (my experience is limited to buying and flipping homes). I'm curious if anyone has experience in this area and can give me general guidance on what to watch out for. Are there any things to be careful about? I know an attorney is the best source of protection, I'm more curious about what to look out for and be aware of during the initial search process as I review potential lots (before I'd involve my attorney).

One thing I'm generally concerned about is how to estimate what the property taxes would be after the land is developed. Is there any real accurate way to estimate what that would be (or limit the damage)?

Also, in terms of financing, it doesn't seem you can mortgage land (not at reasonable terms anyway). My plan was to use a line of credit on my other home to purchase and develop it. Once complete, I'd mortgage the new finished property and use the proceeds to pay off my HELOC. Are there any pitfalls to be careful of there? Or a better way of going about it? How would you suggest financing it?

Thanks so much for any advice!