110 acres of prime land. Should I sell now, wait or ?

Question

110 acres of vacant land, 1 mile of Hwy 287 frontage. New housing development under construction directly across the highway. Currently not zoned for anything besides agriculture. Fort Worth city limits is outside my Southern property line / fence and in planning to be zoned as residential development land soon. Neighbouring properties have been significantly developed &/or are currently being developed.

I have received numerous offers. Should I sell today while outside the city limits with fewer restrictions for a developer or use a two party ground lease with commercial prior to the establishment of the residential zoning. Or wait a year until the land becomes part of the city and then sell? Or possibly something else?

Just joined! Appreciate any and all feedback.

Paul H. · Answer

Lincoln,This is something that my company and I do all the time... we work with land owners to get projects annexed, papered, improved and sometimes we go vertical or we sell to a national builder. Every point along that route has a different lift in terms of value creation. Your best bet would be to do a little research and see if your in the Fort Worth official plan and if you qualify as a good candidate for annexation. Selling before getting a determination on being a candidate for annexation and rezoning at the same time would be short changing yourself significant value.I'm currently doing three annexation and rezoning projects of about 2000 acres. So if you need a little bit of help or guidance, please let me know.

Michael Le · Answer

If you're in no rush, work on getting the property rezoned yourself and increase the value. Get utilities to the property to increase it even more. The closer you get it to be shovel ready the more you'll be able to sell it for.

Jay Hinrichs · Answer

I never understood the partnering with developer route.. Even though as a developer I would like that sometimes.. but for the land owner your taking away your long term cap gains or ability to 1031 and turning it into ordinary income. and the delta between a bulk sale and creating inventory usually is not great enough to partner with builder and take on the risk.. just sell 1031 and then buy your rental income property. Just sayin.

Eliott Elias · Answer

Keep it and make passive income on it forever! This is something you can pass to your kids and grandkids. Maybe partner with a developer to take on a development, or build a few units to rent. The longer you wait the more equity you will see

Paul Sofia · Answer

There's a reason you are getting offers. Check and see if the annexation may be in the process. If so, price of poker just went up.

Account Closed · Answer

Re-read @Paul H., above. Research the cost of building lots in surrounding developments to see what they are going for. This will give you an idea of how much a land developer would make on your property. I would develop the land to individual, shovel ready lots yourself or hire/partner with someone to do it—you’d be the equity partner.

Kevin Blosser · Answer

Hey Paul, I would definitely love to connect. I am a real estate broker in Georgia with development experience and had a client ask to partner with me to help develop his property and sell it. I've never done this as a partner before and have some questions on structure and guidance. Any help would be greatly appreciated! I will private message you.

Ryan Buchanan · Answer

I have a property under contract and am going through the rezoning process now with the County. The nearby city is interested in considering an annexation. I am hesitant because of potential future restrictions and higher taxes down the road with the city vs county... thoughts? Also, and tips to convince the county to let me rezone are appreciated!

Rachel H. · Answer

@Lincoln Harris It really depends on what your goals are. Those who sell land they own to developers are looking for cash sales in their situations most of the time. Since the parcel of land is only zoned for agriculture, you'll have to rezone it if you want to see for other uses such as commercial or residential which does take time. If you get a good offer for the piece of land from a developer and you're in a position to sell, you may just want to take it with the market being how it is now. If you wait a year, you're not sure what the market will be then. Though, it's up to you. Hope that helps. Best of luck with your decision!

Eric Robb · Answer

I have some ideas and could be interested in a joint venture. We build tiny homes and modular buildings and I know there are a lot of mobile home lots in that area. Would be interested in sales lot, building small nice tiny home or Senior housing, many options and only a few acres required.