20 Acres Of Land In Iowa

[Sean Coughlin]

Hello!

My name is Sean.  I've owned an investment company in Iowa for a little over 3 years now.  My business partner and I typically wholesale, flip, or buy and hold.  We have a new (and unfamiliar) opportunity that popped up and we're trying to better understand where to start the evaluation process.  We acquired about 20 acres of land that is currently zoned agriculture and has great yields every year.  We are considering rezoning it to residential and building multifamily units, storage units, trailer park, or solar farm or...  The land is about 15 minutes away from Norther Iowa (college university) and is located right next to a state park (people go camping, rv'ing, etc all summer long in the park). If any of you have gone through a similar process with evaluating investment options, we would love to hear about it.  Any advice, book or tool recommendations would be greatly appreciated! Thanks! Sean
  

[Henry Clark]

Welcome to Bigger pockets (on your post 1) from Glenwood, Iowa.  Change any numbers to fit your boots on the ground knowledge.

I will use 8 years and not NPV calc, just to give the discussion some Magnitude.  Not doing a full P/L analysis, Property taxes, Income taxes, depr, operating costs, etc, you can blow that out.

1.  Farming- 20 acres cash rent at $200/acre.  $4,000 less property taxes $200.  8 years x Say $4,000= $32,000; plus you still own the land.

2.   Need to know more about the location, but I will run with it.  Unless your near a town stay away from traditional storage.  If its a big lake or park, you might look at 4 acres of Boat and RV storage.  150 slots at $50 x 90% occupancy x 8 years= $648,000.  Assume ($150,000) in rock roads/parking, electric, security system and fences.  150 is really light, we have 100 on a square 2 acres.  Shape is very important on how many you can fit.  You still own after 8 years.

3.  If your truly close to the park or main rec area, look at RV park and RV rental.  Plus the storage.  Depends on how passive you want your investment.  If its large enough, you give one or two of the renters free rent for the summer to manage.  RV park, depends on how you pack them in.  Assume 6 acres, 40 spots per acre, state park $17 water/electric per night; private $25 to $50 water, electric, sewer; "A" level $60 water, electric, sewer, shower, washer/dryer, wifi.  Use $35 per night.  240 spots, 50% occupancy, 120 days=  $504,000;  Cost for water, electric, sewer, roads  $???,???; you still own after 8 years.  If you do this, I would recommend you offer different products.  Overnight slots, weekend slots, long-term slots.  Separate these physically and with different spacing and amenities.

4.  Divide into 4 lots and sell for $100,000 per lot.  $400,000  Maybe $10,000 for subdivision legal, survey/plat work.  You don't own after 8 years.

5. SFH, MFH, solar, trailer- leave to you to analyze. Do quick and dirty number of units times your prospective profit levels.

I would recommend go with either a.  Strength of the property, near park, b.  Your wheelhouse/comfort zone, etc.  Also depends on your "Passive" income goals versus flip profit.

4.  Depending on Road access.  One side, two sides on corner, shape of property,  etc.  Quick profit do a split.  Make 4 lots and sell for $100,000 each, depends on the nature/desirability of your land.  We are doing a similar subdivision on our property.