First Ground up constrcution deal

[Anthony Greene]

I am considering a deal in my market in which I found a significantly underpriced parcel of land blocks for major transportation hub in a gentrifying area.  I am close to securing funding for the acquisition through private investors and have a bank lined up for financing the build of a 3 unit multi family.

The part I am concerned about considering the seemingly low price is that there my be some unknown issue with the land.  Can anyone point me in the right directions as to where I can obtain public info regarding the integrity of the land.  The first exposure that comes to mind for me is pollution but like I said this is my first deal of this type.  So I guess there are 2 major questions here.

1.  Where can I go to obtain public info so I can do my due diligence on the integrity of the land?

2.  What are the primary red flags I should be keeping an eye out for?

[Lindsay Diven]

You definitely want to call either the city or county zoning departments. You want to make sure the zoning is listed for the proper use. If not, it will take lots of time and money to get it zoned for the proper use (multi-family, commercial, etc.) Sometimes you can find that on their website. Then you can search in the property clerk's records to see who previously owned the land and what their uses were. You want to stay away from any use like gas stations, auto repair, dry cleaners, etc. that would require environmental remediation. That will cost a ton and require environmental engineers.

It might be worth it to pay a few hundred dollars to a civil engineer or surveyor to do this search for you. 

If it is clear, then move forward!

If it is adjacent to transportation station and/or you are building for low-income, look for potential grants for TOD (transit oriented design), HUD or beautification-related functions. In many blighted areas that are trying to redevelop, they create Community Redevelop Agencies (CRAs) or something similar to provide funding. It may not help with construction, but will help with landscaping, parking, etc.

Good luck! 

We recently purchased a lot steps from the beach and will be constructing a small multi-family.