How Do I Approach Buying Subdivided Lots That Have Not Been Developed

Question

So, I am fishing around on the county auditors sight to look at some maps where I recently rehabbed a property and I come across a "phantom" cul-de-sac

. All the lots have been divided, but none are developed. Some are attached to the neighboring properties and some are absentee owners. Any advice on how to approach buying and developing these?

David Krulac · Answer

@Brandon Sturgill

My first approach would be to talk to the municipal zoning office.  Ask if the road has been dedicated.  Ask if the lots are buildable.  What about utilities?

There was a case here where the developer sold the lots before getting the municipal approvals.  The municipality wanted a second means of egress that would require a bridge over a stream at significant expense.  The developer went ahead and recorded the plan and sold lots and unsuspecting buyers were denied building permits until the bridge is built.  They have been waiting 40 years still no bridge.

Public water and sewer are big issues.  If not available you need to have wells and septics in order to build.

Without the road being constructed, you could also have big expenses building the road to municipal standards.

Other requirements could include side walks, storm water control, street trees, street lights, and running all utilities to the lots, including electric, gas, phone, cable plus water and sewer.

There could be current zoning requirements that require larger lots than those platted maybe 50-60 years ago.  That could require combining lots to build one house.

There a lot to do and a lot to research as part of your due diligence before proceeding.

Besides talking to the town officials, I'd also look at both the subdivision ordinance and the land development ordinances .

Good luck.

Jay Hinrichs · Answer

@Brandon Sturgill

these are called shadow plats in parts of the country.. My father made a living buying shadow plats in CA for 30 years..  Just walk right into your county surveyor or planning department with your map and see if they recognize these are legal lots of record.. or you could order a title report that should give you individual descriptions if they are legal.

then you would talk with city engineer  or City manager about improving them so you could build on them if that's what you want to do... Lots of money made in the shadow plat game on the west coast.  WE do it today in Portlandia they are called lot confirmations.. we are taking a 50/100 and back in the 1890's when they were originally platted they were 25/100's so we can get the city to recognize the old lines and then build two skinnies ... those lots sell for about 75 to 250k per 25x100 with homes selling from 375 to 700k in our market... What I see out in the mid west is that land has no value because you can buy existing houses all over the place for less than replacement value... but I don't know this area of course and maybe there is a market for new builds.

Jay Hinrichs · Answer

@Brandon Sturgill

http://www.biggerpockets.com/forums/44/topics/151875-new-subdivision-development---jay-hinrichs

I just broke ground on a 27 lot subdivision I am doing in Portland... I posted picks and deal points.. Each state is vastly different when it comes to development criteria and specs along with environmental... It is not possible in this day and age in our state to record a plat without all services being done.. Or bonded for.  Land development is a big money game by and large.. When you look at the pic's  If you look at the pic's  being in the northwest storm drainage is a big factor you will see 48 inch pipe.. that is our storm retention system. We store the storm under the streets.. We can also as Bill mentioned create ponds for storage but each site does need to store all storm and rain drains before going into the public system.

@David Krulac

spot on about the bridge my bank forclosed on a developer over in Central Oregon and the final phase was subject to building a bridge.. So the lots were pre platted but not buildable  BAnk ended up having to spend 200k building said bridge.. but they had more value in the lots once they were done...

Brandon Sturgill · Answer

Interesting thought. Thanks, @Bill G.

Bill Gulley · Answer

Water retention is probably too expensive. Could be that those lots are the water retention area counted for the other improved lots. Could be the surveying was done, some dirt work, then the city or department of resources types, said no more run off without storm water compliance. That could have stopped the dirt work. Lose a lot or two and build a community pond with a walkway and benches around it, town planner types like that. Go Natural with Nature :)

David Krulac · Answer

@Brandon Sturgill

You're welcome.

Its not only grading issues but it could also be a drainage area or it could even be wetlands. (+ all of the above.)

Land is not as easy as houses and apts.

Brandon Sturgill · Answer

@Bill G.  Thanks for the perspective. I did a bit more research on these and it appears that the builders family has a couple lots and the rest are attached to the adjacent homes...and there is one absentee owner...so, the lots are valued at about $6k a piece through the county auditor...

I stopped and took a long look at these lots. Aside from being overgrown, it looks like these sit at a level significantly below the developed lots...wondering if there are grading issues...

Brandon Sturgill · Answer

@David Krulac  thanks for the link

Bill Gulley · Answer

Assumptions sound more like specific knowledge of this project Mark, looks to me as a failed project, surveying done, plated, dirt work began and stopped, why?

County auditor here is in the finance department, don't you have an Assessor's Office Brandon?

Adjoining neighbors are in title with the developer? My guess is there is no HOA. The builder may or may not have had problems but neighbors may have raised heck or collectively made an offer purchasing an interest in specific lots to "protect" the homeowner's property values.

A trick of builder developers is to build nicer homes first, then infill latter with cheaper homes allowing the nicer home to influence price, they also add commercial later on as either depresses value of the nicer home built first.

Neighbors can stop a development. The builder developer could offer the neighbors a partial interest buying him out, In such cases the property may need to go to court to patrician the interests forcing sale if the builder goes there. The plan now may be waiting on market changes building nicer homes than originally proposed.

Lots of assumptions can be made.

Best way to learn in the developing arena is 1. get with a developer and prostitute yourself with labor to hang around and learn or 2. do the same with a civil engineer that is active in developments. It's not by contacting owners hinting that you're a buyer. My guess is the developer owners have expertise, are satisfied with the current situation and are not motivated, if they were it would be for sale. Old, small town developers that are retired are rarely motivated, but the day will come. :)

David Krulac · Answer

@Brandon Sturgill

http://oreiaconvention.com/

How Do I Approach Buying Subdivided Lots That Have Not Been Developed

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