Own 12 acres of land, how to maximize it?

[Brian Hill]

Hello all, this is my first post and I’m in bad need of advice. Sorry for the book I’m about to write, but there’s a lot to unpack.

First, I'm a beginner investor. I own a SF property in Florida that I BRR'd and was a homerun (~100K invested, ~250K ARV) but that got held up for two years with a clouded title (no fault of my own). Anyhow, this ruined my momentum, since I had to wait to get my money back out of the property.

In the meantime, we inherited 12 acres of land in NC and moved back to help care for elderly family. The land is cleared (former farmland) with a recent survey. The land is sentimental to my wife, so we want to maintain ownership, but we still want to make use of it. The land is in a relatively high demand area (a rural Charlotte suburb, pop growth ~18%). Rental properties out here are snatched pretty quickly when priced right.

The land is valued (comps) at ~30K per acre. I haven’t worked out exactly what this comes to after fees and such, but I expect netting something like 250K if we choose to sell it. Again, this is not what we’d like to do (sentimentality), but I see this as better than paying taxes each year to simply sit on the land.

Preferably, we would like to develop this land to build a housing development of rental properties, possibly as many as 30-40 units (1/4-acre plots, ~1200 sq ft 3/2 homes). The problem is, it’s very hard to figure out where to go next in this route. I’ve read ‘Making it in Real Estate: Starting Out as a Developer’ By John McNellis, and while it is a great book, it is very much a 30,000-foot view, and I need something more at ground level.

My initial thought was to just begin plopping down SFH doors one at a time on the land, but then I got into questions about parceling out the land, county approval once I go over a certain number of units, etc. Also, it's darn near impossible to find out what it costs to build on your own land, especially if you have the expertise to do some of the work yourself.

Ultimately, what I came down to was that I needed a partner, preferably a developer who is willing to bankroll the project. The things we bring to the table are:

1. The deal
2. The land
3. Property management. My wife is a realtor and has experience, plus we are basing our approach on our Florida property manager’s approach, as they are OUTSTANDING.
4. Finishing labor on the units, specifically flooring, fencing, and fixtures. My son was a fencing foreman for many years, and we both know how to install vinyl plank flooring and fixtures.

What we need is:

1. Development expertise
2. Contractors
3. Funds

The end result we would like is a split on the property and net income with a future buyout option when I am able to finance the units. For example, if I refinance the properties for $5,000,000 on completion, I can pay the full value of development costs plus a bonus to the developer (presumably based on the property value) for the properties in exchange for exclusive ownership. Until such time, the developer would get a share of the profit each month.

Our end goal is to fully own the property, and my thought was that if a developer wanted to come in with me and bankroll it, they will get well paid for the project, plus get a nice little check each month while they are waiting on the big payoff.

If the whole thing flops (i.e. we overestimated the rental demand), we can still sell the units for ~$250K each (current comps for new construction), which will make the developer whole and give us hopefully more money than we would have gotten just selling the land.

So, my questions are:

Is this a reasonable approach? If so, what should the cuts be?

How in the heck can I find a good developer to partner with? The local REIA meets are nonexistent (COVID).

Are there any good books I can read on this subject?

Are there any better approaches?