How do I find a developer?

Question

I'm wanting to develop approximately 30 acres of residential zoned land I own in Oklahoma. In the center of this acreage is a 20 unit apartment complex, that I own as well. I've got my own visions of what I'd like to build and I'm trying to reach out to area realtors to get feedback. I've never done more than rentals, rehabs and flips, never broke ground on anything like this! Before I invest too much time and money in this venture myself, I know i'm going to need a partner/s. How should I handle that? Go to builders, ask realtors? Thoughts?

Greg Dickerson · Answer

@Tab Teehee since you own the property you are already ahead of the game. For infill subdivisions like this lots builders can generally pay 20-25% of the value or sale price of the house for the land depending on demand and price point. This is for a finished lot ready to build. Not necessarily cleared but all roads, utilities etc but not well and septic if you do not have water and sewer but otherwise ready to break ground. You can call some local production and spec builders and ask them what they can pay for lots. Usually They will tell you. After you determine the price point on the lots you work backwards form there and subtract all costs of the development and a profit margin you are happy with to determine the price you can pay for the raw land. I like a 30% margin for net profit just to be safe

First step is to determine if the project will even work from a financial standpoint. Start with the end value of the buildings or lots and work backwards. Next you want to check with the city or county to determine if you can do what you want to do and what is required for all zoning approvals and the time frame. Ask if you have to install curb, gutter, sidewalks, street signs, street lighting or any other special requirements. Check to see If there are any specific street design requirements, DOT requirements, permits or traffic studies, DWQ, Army Corp or any other environmental requirements or permits. General permit fees, proffers, water/sewer tap fees and the process of setting taps and connecting.  Do you need to install manholes or fire hydrants.

You also want to find out the bonding requirements, inspections and CO process. Make sure to check with the utility companies and get cost estimates from them for availability, fees, hookup charges, transformer and power line/power pole locations or relocation requirements, water, sewer,gas, cable etc You will need ball park cost estimates from site work contractors for site work, roads, installation of utility lines etc. This is just a starting point but should get you going in the right direction.

Greg Dickerson · Answer

Yes you should definitely reach out to some local builders and developers not only can I help you understand the cost to develop the property but they can tell you what the highest and best use of the property would be which will ultimately tell you the value of the property itself and or the lots.

Tab Teehee · Answer

@Karen Margrave

Thanks Karen! I hadn't thought about a civil engineer! The property is part zoned residential and part commercial.

Tab Teehee · Answer

@David Pierce

Hello fellow Floridian and thanks for the questions!

This is a smallish town (pop 10k) but it is home too many large employers as well as Googles second largest data center in the world! Student housing isn't much of a need but affordable housing, as is the case with much of the country, is. I would want to build some affordable housing for first time buyers and retirees....possibly a zero lot line, exterior maintenance provided HOA community.

Tab Teehee · Answer

@Greg Dickerson

Wow that's a lot of information! Thanks so much for taking the time! This is a small town (10k pop) and the have city municipal utilities that provide the electricity, gas, water, sewer, so I should be able to go straight to someone in that department for the utility questions. I do have maps from them that show all the water/sewer/gas/electric, lines that surround the property. The city of course has a road department, building code zoning department that should be able to clear up a bunch of those questions. Would it be a good idea to reach out to some of the area home builders that have experience navigating this?

Karen Margrave · Answer

@Tab Teehee What is the property zoned? You say theres an apartment complex in the middle if the property,  so there's obviously utilities, etc. Go talk to a Civil Engineer. They can give you a good idea of what is possible on the parcel, development costs for infrastructure, etc. Once you know that, you'll be able to figure out next steps. Not all brokers, contractors etc are knowledgeable about development.

David Pierce · Answer

How many units can you build?What type? Apartments? SFH? Duplexes?If SFH - What is the market rent for 3/2's? (Projected Income)Any colleges nearby? Student housing?You have to figure out the income and demand first...

How do I find a developer?

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