Newbie- Land purchase and development of Retail Shells

[Chirag Mehta]

Let me start this off with a bit of my background.  I own 5 sfr in San Antonio and rent them out with a property manager handling all details.  I am currently in the corporate world-tech sales and wanting to accelerate this business but taking a different and more complex route.  

I have my eyes set on a plot of land near my home where there is high income and significant traffic in a rapidly growing area in Cedar Park, Texas (north of Austin).  My objective is to buy about an acre of land, that is already leveled, access is being done, and utilities are going to be 5 feet from the property; and then build 3-4 shell retail spots on my plot, owner occupy one of them with a business and lease out the others.

I am meeting with a developer this weekend, but have some wrong numbers regarding the average cost of building a shell space.  I have meetings with my lawyer to discuss partnership contract and acct for the financial piece.

Since this is extremely new, I am building a team of a contractor, broker, loan officer, accountant, Lawyer and investors.  I have been interview these folks and almost down to the right folks.

What I am seeking from the community is experience from those that have done this and have been successful but also those that have pitfalls to learn from those to either not make the same mistake, or do what works.  I am happy to provide any and all detail and more so...if you are in the austin/cedar park Texas area and are looking to partner and you have experience in this area...I am all ears.

Thank you in advance to all that replied!

[Logan Singleton]

Hi Chirag,

I'd be happy to assist with the financing of this project. I have sent you a PM

[Ronald Rohde]

We represent several developers in Cedar Park, they all developed for owner user + rentals, but I'd say the main thing from a legal perspective is ensuring good GC and sub agreements. Conditional and unconditional lien waivers prior to getting paid.

Happy to chat more

[Adam Reilly]

You're also going to need survey and engineering work to get the permits done for putting in the utilities to the buildings, flatwork and other improvement requirements around the buildings. This is typically parking, detention pond and landscaping. I do most of this part in my day job. 

You'll need a building permit, and that will require either an architect or you to work with the shell building designer. This part, I don't know so much about.

if you need more info, feel free to reach out.

[Brent Thomas]

Quote from @Adam Reilly:

You're also going to need survey and engineering work to get the permits done for putting in the utilities to the buildings, flatwork and other improvement requirements around the buildings. This is typically parking, detention pond and landscaping. I do most of this part in my day job. 

You'll need a building permit, and that will require either an architect or you to work with the shell building designer. This part, I don't know so much about.

if you need more info, feel free to reach out.

@Adam Reilly I would assume you are civil engineer based on this last response. I am in the Houston area where I build most of my commercial projects for my construction company. However, as a developer, what would I need to know when looking for land as it pertains to detention requirements? I have found a couple locations that are in Zone "X" and the price is right. I know these will require detention and plan on losing about ⅓ of land for this. It seems to me though that any project I have built in the last few years require detention regardless of being in the flood plane. Can you elaborate? 

[Brent Thomas]

Quote from @Ronald Rohde:

We represent several developers in Cedar Park, they all developed for owner user + rentals, but I'd say the main thing from a legal perspective is ensuring good GC and sub agreements. Conditional and unconditional lien waivers prior to getting paid.

Happy to chat more

@Chirag Mehta, I completely agree with obtaining conditional and unconditional waivers throughout the duration of the project. 

[Ronald Rohde]

Any update? Did you go under contract on the land?

[Brent Thomas]

Quote from @Chirag Mehta:

Let me start this off with a bit of my background.  I own 5 sfr in San Antonio and rent them out with a property manager handling all details.  I am currently in the corporate world-tech sales and wanting to accelerate this business but taking a different and more complex route.  

I have my eyes set on a plot of land near my home where there is high income and significant traffic in a rapidly growing area in Cedar Park, Texas (north of Austin).  My objective is to buy about an acre of land, that is already leveled, access is being done, and utilities are going to be 5 feet from the property; and then build 3-4 shell retail spots on my plot, owner occupy one of them with a business and lease out the others.

I am meeting with a developer this weekend, but have some wrong numbers regarding the average cost of building a shell space.  I have meetings with my lawyer to discuss partnership contract and acct for the financial piece.

Since this is extremely new, I am building a team of a contractor, broker, loan officer, accountant, Lawyer and investors.  I have been interview these folks and almost down to the right folks.

What I am seeking from the community is experience from those that have done this and have been successful but also those that have pitfalls to learn from those to either not make the same mistake, or do what works.  I am happy to provide any and all detail and more so...if you are in the austin/cedar park Texas area and are looking to partner and you have experience in this area...I am all ears.

Thank you in advance to all that replied!

 @Chirag Mehta For construction costs, you should be around +/- $100 PSF which would include all sitework, utilities, and going vertical with modern finishes. 

[Kristi Kandel]

Quote from @Chirag Mehta:

Let me start this off with a bit of my background.  I own 5 sfr in San Antonio and rent them out with a property manager handling all details.  I am currently in the corporate world-tech sales and wanting to accelerate this business but taking a different and more complex route.  

I have my eyes set on a plot of land near my home where there is high income and significant traffic in a rapidly growing area in Cedar Park, Texas (north of Austin).  My objective is to buy about an acre of land, that is already leveled, access is being done, and utilities are going to be 5 feet from the property; and then build 3-4 shell retail spots on my plot, owner occupy one of them with a business and lease out the others.

I am meeting with a developer this weekend, but have some wrong numbers regarding the average cost of building a shell space.  I have meetings with my lawyer to discuss partnership contract and acct for the financial piece.

Since this is extremely new, I am building a team of a contractor, broker, loan officer, accountant, Lawyer and investors.  I have been interview these folks and almost down to the right folks.

What I am seeking from the community is experience from those that have done this and have been successful but also those that have pitfalls to learn from those to either not make the same mistake, or do what works.  I am happy to provide any and all detail and more so...if you are in the austin/cedar park Texas area and are looking to partner and you have experience in this area...I am all ears.

Thank you in advance to all that replied!

 Hey Chirag - I've been in RE development nationwide since 2007. It seems like you're asking the right questions and talking to the right professionals. I'm happy to have a conversation with you if you'd like. Just shoot me a DM. 

Here's a link to various resources for vetting some of your partners: https://drive.google.com/drive/folders/13Z0B7mV--YRtVN3TJhez...

[Adam Reilly]

 Hey Brent,

Sorry for the delay in this, I haven't been back in a little bit and just saw this question.

Detention is not related to floodplain. You'll generally need to do detention to offset for any impervious cover you add to the property. This is to alleviate any added flooding your project creates for the downstream properties. It depends on the area you're working in too. North of Austin, the county regulations say you don't have to do it IF you're only doing residential, certain lot sizes and limiting the impervious cover of each lot. However, if you're in a city area, you'll have to plan for it. With the recent nation wide updates for flood modeling, you'll want to plan for bigger ponds. You can reduce size, if you go deeper, but that only works if you have steep sites or are willing to add a pump system to the outlet. 

[Robert Ellis]

Quote from @Chirag Mehta:

Let me start this off with a bit of my background.  I own 5 sfr in San Antonio and rent them out with a property manager handling all details.  I am currently in the corporate world-tech sales and wanting to accelerate this business but taking a different and more complex route.  

I have my eyes set on a plot of land near my home where there is high income and significant traffic in a rapidly growing area in Cedar Park, Texas (north of Austin).  My objective is to buy about an acre of land, that is already leveled, access is being done, and utilities are going to be 5 feet from the property; and then build 3-4 shell retail spots on my plot, owner occupy one of them with a business and lease out the others.

I am meeting with a developer this weekend, but have some wrong numbers regarding the average cost of building a shell space.  I have meetings with my lawyer to discuss partnership contract and acct for the financial piece.

Since this is extremely new, I am building a team of a contractor, broker, loan officer, accountant, Lawyer and investors.  I have been interview these folks and almost down to the right folks.

What I am seeking from the community is experience from those that have done this and have been successful but also those that have pitfalls to learn from those to either not make the same mistake, or do what works.  I am happy to provide any and all detail and more so...if you are in the austin/cedar park Texas area and are looking to partner and you have experience in this area...I am all ears.

Thank you in advance to all that replied!

 What's your outcome? less money than more? experience? meeting with one developer is a good start but if you have plans I'd be happy to look. Get a good architect first and design what you need don't jump the gun. 

[Kishore Ginjupalli]

Quote from @Brent Thomas:

Quote from @Chirag Mehta:

Let me start this off with a bit of my background.  I own 5 sfr in San Antonio and rent them out with a property manager handling all details.  I am currently in the corporate world-tech sales and wanting to accelerate this business but taking a different and more complex route.  

I have my eyes set on a plot of land near my home where there is high income and significant traffic in a rapidly growing area in Cedar Park, Texas (north of Austin).  My objective is to buy about an acre of land, that is already leveled, access is being done, and utilities are going to be 5 feet from the property; and then build 3-4 shell retail spots on my plot, owner occupy one of them with a business and lease out the others.

I am meeting with a developer this weekend, but have some wrong numbers regarding the average cost of building a shell space.  I have meetings with my lawyer to discuss partnership contract and acct for the financial piece.

Since this is extremely new, I am building a team of a contractor, broker, loan officer, accountant, Lawyer and investors.  I have been interview these folks and almost down to the right folks.

What I am seeking from the community is experience from those that have done this and have been successful but also those that have pitfalls to learn from those to either not make the same mistake, or do what works.  I am happy to provide any and all detail and more so...if you are in the austin/cedar park Texas area and are looking to partner and you have experience in this area...I am all ears.

Thank you in advance to all that replied!

 @Chirag Mehta For construction costs, you should be around +/- $100 PSF which would include all sitework, utilities, and going vertical with modern finishes. 

 Hi Brent

I'm in the similar boat as Chirag. I got a quote for 8K sft retail from a construction company for around $120/sft, this includes site prep, utilities, metal building erection, exterior finishes, interior insulation etc (basically build the shell from scratch). I see you mentioned $100/sft, do you know of any builders/construction companies in Austin area?

I'm still working with architect and seller on land subdivision. Could you share some tips on how to find the builders or is there any platform that I can use to reach out to multiple builders to get quote once the architectural drawings are finalized?

Also what would you estimate for architect fee for 1 acre lot with utilities on-site and for 8k to 9k sft retail strip. 

[Ronald Rohde]

Quote from @Kishore Ginjupalli:

Quote from @Brent Thomas:

Quote from @Chirag Mehta:

Let me start this off with a bit of my background.  I own 5 sfr in San Antonio and rent them out with a property manager handling all details.  I am currently in the corporate world-tech sales and wanting to accelerate this business but taking a different and more complex route.  

I have my eyes set on a plot of land near my home where there is high income and significant traffic in a rapidly growing area in Cedar Park, Texas (north of Austin).  My objective is to buy about an acre of land, that is already leveled, access is being done, and utilities are going to be 5 feet from the property; and then build 3-4 shell retail spots on my plot, owner occupy one of them with a business and lease out the others.

I am meeting with a developer this weekend, but have some wrong numbers regarding the average cost of building a shell space.  I have meetings with my lawyer to discuss partnership contract and acct for the financial piece.

Since this is extremely new, I am building a team of a contractor, broker, loan officer, accountant, Lawyer and investors.  I have been interview these folks and almost down to the right folks.

What I am seeking from the community is experience from those that have done this and have been successful but also those that have pitfalls to learn from those to either not make the same mistake, or do what works.  I am happy to provide any and all detail and more so...if you are in the austin/cedar park Texas area and are looking to partner and you have experience in this area...I am all ears.

Thank you in advance to all that replied!

 @Chirag Mehta For construction costs, you should be around +/- $100 PSF which would include all sitework, utilities, and going vertical with modern finishes. 

 Hi Brent

I'm in the similar boat as Chirag. I got a quote for 8K sft retail from a construction company for around $120/sft, this includes site prep, utilities, metal building erection, exterior finishes, interior insulation etc (basically build the shell from scratch). I see you mentioned $100/sft, do you know of any builders/construction companies in Austin area?

I'm still working with architect and seller on land subdivision. Could you share some tips on how to find the builders or is there any platform that I can use to reach out to multiple builders to get quote once the architectural drawings are finalized?

Also what would you estimate for architect fee for 1 acre lot with utilities on-site and for 8k to 9k sft retail strip. 

 Isn't his quote from a year ago? $120 still sounds reasonable for today