Large Lot 340-acre Rural Subdivision North of Lexington, KY

[Alicia Prokos]

Investment Info:

Other other investment in Cynthiana.

Purchase price: $1,300,000
Cash invested: $700,000
Sale price: $3,300,000

Large lot subdivision outside of Cynthiana, KY, within 15 minute drive to Georgetown Toyota Assembly Plant. Purchased three gently rolling parcels and combined them to create a creekside community of 33 lots. Demo'd tear-down structures, installed roads, utilities, pavilion, fishing pond and other amenities with HOA for residential end buyers wanting to build their own homes or mini-farms with loose restrictions. Thirty-three (33) tracts went on market in June, 2022. Every single tract was sold out within 6 months, despite rising interest rate environment in 2nd half 2022.

What made you interested in investing in this type of deal?

The demand I saw for growing families wanting a home in the country with a rural lifestyle, yet close to employment and amenities. I also saw a desire for HOA protection from junky cars up on blocks in the front yard, but much looser restrictions so that people could do what they wanted without a lot of interference, such as chicken coops, 4H projects, vegetable gardens, barndominiums, etc.

How did you find this deal and how did you negotiate it?

I found it through my land real estate agents.

How did you finance this deal?

We self-financed this deal.

How did you add value to the deal?

We demo'd tear-down barns and a burnt-out 18th century home. We cleared out scrub and unsightly nuisance vegetation, bushhogging entire 340 acres. We built a gravel road network and installed water main extension and hydrants and above ground electricity. Tested for septic and set up "fill and waits" for non-perked property. Renovated grain silo at entrance and added recreational pavilion complete with outdoor furniture, stocked fishing lake, fire pit, and landscaped and lighted entrance.

What was the outcome?

The development met our financial goals and was successful. The local Harrison County planning & zoning department was very pleased with the outcome because we were able to address a need for 5-10 acre lots for residential building in the community.

Lessons learned? Challenges?

Obtaining variances for "flag" attachments to surrounding public roads was a challenge. We found existing subdivision and zoning regulations had lost track of their reasons for being but were still zealously defended by old timers who offered strong resistance. We brought in several new amenities to the community in exchange for the variances. We violated a few stormwater regulations accidentally but corrected our errors.