New investor with development opportunity.

[Ezra Simon]

I am new to the real estate investment side of things. I have 15 years of remodel and custom home building experience. As a Forman for 5 of those years building custom homes and a GC for 3 years. The last 5 years I have been a Forman for a bridge building and excavating company in wa state. I just started flipping houses full time and I have a opportunity on a possible 30 lot residential development parcel in Olympia Washington. It's zoned R6-12, 3.42 acres with %20 wet lands (pond) in one corner. I have never done anything this large scale. so I possibly would be looking to partner with a developer who would help teach me and walk me through the process. Any input, thoughts, or advice would be greatly appreciated.

[Chris L.]

Hello Ezra, 

Sounds like you definitely have the construction skills to manage the construction of the houses. Just out of curiosity.

Are the lots shovel ready?

What price point are the houses?

What is the absorption rate of houses in the same price point in the surrounding areas? 

I only ask these questions because 30 houses is a lot to sell. Depending on permitting, construction time and market conditions it could take you 5-6 years to get out of that single investment. 

My suggestion is stick with what you know and grow slow? If you want to become a developer that is awesome but do a minor subdivision first so you understand the process.  

My final point is projects of this size require a lot of capital and I mean a lot! If you have deep pockets or a partner willing to pony up be prepared to outlay 30-40% of the project cost between down payment, closing, first construction draw, etc... while you wait for inspections and draws from the banks to be processed. 

Hope that helps! And if you decide to go for it I hope you crush it!

Cheers!