All Forum Posts by: Henry Clark

Just weather questions.  

Where to move snow.

Orientation- might not be an option, but a north south orientation allows the sun to help melt the snow. If east to west, then the north side of the buildings or units won't melt easily.

Did you go with closer to the population or closer to the resort area?  Or could do both.  People hate dragging their RV's back to town on crowded Sundays.

Good luck.  If you do rock surface check out using Engineering fabric underneath.

Its a Grouper down in Belize.  My buddy Noel went spear fishing with his friends.  They are unemployed since they are snorkel tour guides and no travel is allowed.  Its "scored" since they were getting reading to cook it over a fire on the beach.  The rest of the fish they will take back to town for their families.

Well try to grill some fish.

22 September 2020, 07:43 PM Next up is the drain tile contractor. He will be putting in two drains for the Apartment complex parking lots above us. He will attach them together where they meet.

Then he will put in a "Drain" tile along the Retaining wall. This is to catch underground seep water from the hill above, which was causing the field to have a wet spot.

Both contractors had a hard time getting on site. The building contractor had a blow out on a trailer coming up and had to send someone back for an impact wrench to change the tire. The drain contractor had his skid steer trailer stolen, then found, notified it was at the police impound, so it took him a while to get his skid steer on site. He uses it to place rock in the bottom of the ditch and also to put the drain pipes in the trench.

He is putting in a 24 inch pipe, starting from the Storm retention pond and working backwards. This will narrow down to a 10 inch pipe for the far parking lot drain and also the "Drain" field tile. I asked him to switch buckets when he gets to the 10 inch pipes so he both doesn't dig out as much dirt, but also so the dirt will settle and compact quicker on the 10 Inch line, versus using the bucket for the 24 inch line. These trenches are being built where concrete roads will go. The more they "settle" the less cracks I will have in the roads. He will compact as he goes, but it still won't be as good as solid dirt.

Whole hog or partial.

a.  Depends on your road and lot layouts.

b.  Depends on your financing mechanism.  Does it have a construction loan portion to it.  Can you re-open it with the same bank and do another construction loan using the same collateral.  Example:  If you do an SBA loan, then your second phase will also have to be with them, unless you have more collateral to put in and can segregate the property as different subdivision lots.  Is your partnered committed to a second phase.

c.  Partial, will end up with added costs.  Example if you could do the whole project for $2mm.  But instead split it.  You might add another $100k to $150k to the project.

d.  If your fill out rate you estimate at 3 years, then you should build out the whole project at once.  If you thought 10 years, then you might phase.

Sounds like your cooking.

Double access is where the entry way is split in half for two houses, versus each having their own.

Finance, you will need solid numbers and a plan to approach a bank. You will need to ask for a construction loan (interest only) for xx months, or till xx units are sold; then principal and interest payments.

If you do a traditional subdivison, you have to put in the roads, underground water/sewer/electricity.  This is a lot of money, which you need to quantify.  Do your layout and talk with those trades.

Example:

Lets assume you do just one road with two entrances, one at each end.  20 acres if a rectangle is 1,320 feet long.  Use this figure for your roads, water, sewer, electric.

Just making the following up:

Road- 25 ft wide, 6 inches thick, before curbs.  I paid $450,000 for 1,800 feet for my storage units.  Your roughly $330,000

Sewer/water/electric- wild guess $250,000

Curbs and driveway entrances- on 60 units; $500,000

Street lights- ?????

Engineering plans- $80,000

Total above- $1,160,000 not including land cost.

Your realtor above $30,000 per lot times 60 lots= $1,800,000

So your in the $2,000,000 ballpark for 60 lots= $33,000 per lot.

Example: you plan to sell for $60,000 per lot;

Possible profit of 60 lots; times $60,000 price less $33,000 cost= $1,620,000.  All of your lots won't sell in a reasonable price range or amount of time.  To sell this will probably take 10 years if your in a normal town.  You have to carry the interest and principal costs.  So you won't be earning the $1,620,000 in total.

Another option is to take the 20 acres, which you have three sides with road access.  Divide it into 10 lots and sell each one for $100,000; since they are 2 acre lots.  Sales $1,000,000.  Less the land cost.  Less about $100,000 development costs.  You don't put any driveways, electric, water, sewer in.  Let them do it.

Option 2:  Lets say it takes you 4 years to sell all of the lots.  You make $500,000 net on the project.

Option 1: Versus say $1,200,000 above (after interest and 10 years exposure).

Plus how much learning curve and mistakes do you need to go through.  Plus you won't make a "profit" on the larger subdivision until you have sold about 70% of the lots.  Your funds will be tied up for about 6 to 8 years.

Take the above conceptual approach and firm up the numbers.

Start small and make your Big Mistakes early.

County right, not city?

You need the county to tell you the following:

a.  minimum lot size you can divide into.

b.  Road access, can you do one or two driveway accesses.  Depends on how much "Sight" line you have both ways.  You can always do a joint access driveway.

c.  Make sure you have water on the properties.  If you do a formal Subdivision, you will probably be required to dig a test well.  $1x,xxx.

d.  Do a percolation test, to make determine your sewer will function.  Depending on the number of acres, you can either do yourself or have to pay someone.  Doesn't cost that much.  If you have a post hole digger and time, you can do yourself.

Decide if you want to do a Subdivision or to subdivide the property.  Subdivision could take you a year depending on how often your county does a subdivision. Mine hadn't done one in 10 years.  Or divide the land.   You have no control over what the first lot does.  If I build a lime green house or put a trailer in, this might devalue your other lot.

Join your State Self Storage association and they will have.  Otherwise join Self Storage Talk forum and ask for examples.

Lived in Florissant and Chesterfield.  St Louis is a conglomeration of about 14 different neighborhoods.  You can find good or bad.  You have to go by neighborhood.

Buy/hold- its in the Midwest so no great ups/downs in the market.  Regional center for hospitals, universities, employers and travel corridor.

Recommend you do two calculations on two different subdivision layout approaches:

a.  Traditional subdivision- put in road, underground utilities, etc.  Look at other subdivisions near you.  What size did they make their lots.  That is probably the size you have to do to both cover your capital costs and then make a profit.

b.  Non traditional- take the 20 and based on road frontage, do double access entry ways.  See how many lots you can do per the city.  This will be a lot less fewer lots, but both your upfront capital costs will be way lower and your risk exposure over several years will be lower.  Let the new owners get the water and utilities.

c.  Don't do a subdivision, just divide the land and sale with no subdivision rules.  This opens you to someone buying and building a bad property.  A Pink or lime green house in the middle.

See Journeys End subdivision in Glenwood, Iowa.  We went with larger lots and little up front cost.

Subdivision and entry way fees, maybe $1,000.

Surveyor and attorney for plats and subdivision filing- $14,000 total.

We did go ahead and put in concrete entry ways for a total of $10,000 for 5 entry ways.

We owned the ground to begin with, thus we are only sitting on the $25,000 above to carry.

Critical questions:

1.  Fire hydrants- cost me $130,000 to bring one to a location in the city.  Do you need one close by.

2.  Storm retention ponds and storm drainage system, any needed?  This will cut into your lots and add cost.  Storm drainage system cost me $150,000 at one site.

3.  Water lines- are they truly in front of your land?

4.  Utilities- how close are they?  You can get an estimate to bring them to your site from your electric company.  On to the site to lots, you will need your electrician to estimate.

5.  How many access roads are you allowed across the face of the property.

Check the above out first.  Then design the layout both ways.

Do your layout.  Then do estimates.

Road- city sets width and thickness.  Find those and give to a contractor, he can give you numbers easy.  Example:  have 1,000 foot, 6 inches, 25 foot wide with curbs on both sides.  Give me an estimate.

Underground electric- same approach.

Underground water/sewer- same approach.

We had fun doing ours.  Pricing- overprice the most desirable lots.  See what deals you will make with contractors to build spec homes.  Estimate how many lots "won't" sale and build into your projections.