Buying land and building a multi-family home on it

[Demetri Wilright]

I'm new to real estate and saw something that peaked my interest, buy land and then building a property.  

Because I have a lack of familiarity of it what would be the best ways to evaluate a good deal for land?  Additionally what are some of the concerns you would have, such as permits, contractors, and more?  

Lastly would recommend partnering with someone more experience for your first deal like this or trying it on your own?

[Ty Coutts]

Hi Demetri Wilright, buying land and building a property can be a rewarding venture, but it also comes with its unique set of challenges. I would consider the following in your position. 

Location:

Zoning and Land Use: Ensure the land is zoned for the type of property you want to build. Check local zoning laws and future land use plans.

Accessibility: Consider proximity to roads, utilities, schools, and other amenities.

Market Trends: Research property values in the area to understand the potential for appreciation.

Land Characteristics:

Topography: Flat land is generally easier and cheaper to build on than sloped or rocky terrain.

Soil Quality: Conduct a soil test to determine if the land is suitable for building. Poor soil can lead to expensive foundation issues.

Flood Zones and Environmental Concerns: Check if the land is in a flood zone or has environmental restrictions.

Utilities and Infrastructure:

Water, Sewer, and Electricity: Ensure these utilities are available or assess the cost of bringing them to the site.

Road Access: Check if there are existing roads or if you need to build access.

Permits and Regulations:

Building Permits: You'll need various permits for construction, which can be a lengthy and complex process.

Environmental Regulations: Ensure compliance with environmental laws, especially if the land has protected species or habitats.

Contractors and Construction:

Hiring Reputable Contractors: Vet contractors thoroughly, checking references and previous work.
Cost Overruns and Delays: Budget for potential overruns and delays. Construction projects often take longer and cost more than initially planned.

Financing:

Land Loans: Land loans can be more difficult to obtain and have higher interest rates than traditional mortgages.

Construction Loans: You might need a construction loan, which covers the cost of building the property.

Benefits of Partnering:

Experience and Knowledge: A partner with experience can help navigate the complexities of land purchase and construction.

Risk Sharing: Sharing the financial and operational risks can be beneficial.

Network: An experienced partner will have a network of reliable contractors, suppliers, and inspectors.

Considerations:

Partnership Agreement: Clearly define roles, responsibilities, and profit-sharing in a legal partnership agreement.

Finding the Right Partner: Choose someone whose expertise complements your skills and who shares your vision for the project.

If it's your first time buying land and building, partnering with someone experienced is often a wise choice. They can provide invaluable guidance and help you avoid costly mistakes. However, if you prefer to go it alone, make sure to do thorough research and consider hiring a consultant or mentor for guidance.

Feel free to ask more specific questions or for further details on any of these points! This is a lot of information, so please schedule a time to chat with me if you'd like down below.