New Development - Building Townhomes - Where to start?

[Jenna Meditz]

We are currently under contract on a piece of land where we can build 6 attached units by right. Initially, our thought was to keep all of these units on one parcel, held in the name of our LLC, as our strategy is to build and hold. We're wondering if maybe we should divide the lot into 6 parcels (one for each townhome), so if we needed to we could sell each unit individually. The thought is that we would be able to achieve a better return selling each unit individually, as opposed to selling all 6 doors to an investor if we ever needed to do so.

My question is: At what point would we want to divide this lot? 

Would we need to divide the lot prior to breaking ground? Would we begin construction and apply for the division once we know how the property lines would be established? Or would we complete the entire build and apply for the division into 6 parcels post-construction?

This is our first time developing, so any information or advice you can lend is much appreciated. 

Thanks in advance!

[Robert Collins]

Hi Jenna,

Congratulations on your upcoming development project! It's great that you're considering the option of dividing the lot into separate parcels for potential individual unit sales. Here are some considerations regarding the timing of lot division:

1. Zoning and Local Regulations: Firstly, review the local zoning regulations and subdivision requirements in Greenville, SC. These regulations will outline the specific criteria and processes for dividing a lot and creating separate parcels. Compliance with these regulations is essential to ensure a smooth and legally compliant division.
2. Pre-Construction Decision: It's generally advisable to determine whether you want to divide the lot into separate parcels before commencing construction. This allows you to plan and design the project with the individual parcels in mind. By dividing the lot early, you can consider factors such as unit placement, access, parking, and any other considerations specific to each individual unit.
3. Permits and Approvals: You will likely need to obtain permits and approvals for the subdivision process. It's important to consult with the local planning department or relevant authorities to understand the specific requirements and timelines for submitting the necessary applications. This will give you a clear understanding of the timeline for the lot division and when it should ideally occur in relation to the construction process.
4. Cost Considerations: Dividing the lot may involve additional costs such as surveying, legal fees, and administrative expenses for obtaining the necessary approvals. Be sure to factor in these costs when evaluating the financial viability and feasibility of the project.
5. Project Management: Dividing the lot post-construction is also an option, but it may involve additional complexities and potential disruptions to the existing structures. This approach could require modifications to the property, such as adjusting property lines or making structural changes to accommodate the new parcel divisions.

It's important to consult with a local real estate attorney or land development professional who can provide guidance specific to the Greenville area and ensure compliance with local regulations. They will help you navigate the subdivision process and advise you on the most appropriate timing for lot division based on your project's unique requirements.

Good luck with your development project, and I hope it proves to be a successful endeavor for you!