All Forum Posts by: Danny Kay

Yes I have had several subdiving projects (small and larger-ish) in Atlanta and Subdividing is not inherently bad, but there is a lot of moving parts (even on smaller projects). With 13 lots I would probably start with a survey, site plan, and grading plan. Then start working county/city to get their feedback. Depending on jurisdiction this can be informal process, or an official round table session of sorts. Keep an eye out for any neighborhood groups with lots of power, they can be ...... interesting.

Once a grading plan is available, and you know where utilities are, you will be able to start working on zeroing in on costs.

I would call a few local builders, and see what price point padded lots would interest them at. Hopefully you get some consistency. At only 13 lots, the nationals will likely want nothing to do with it.

The cheaper and less riskier alternative would be to turn key the design, zoning, and permitting phase of the project. Builders like buying at this phase because the red tape is out of the way, and they can save a couple bucks by hiring the infrastructure contractors directly. Obviously there would generally be less profit for you, but a fraction of the risk.

According to my last couple conversations with lenders, I would anticipate needing 40-50% of the project cost in cash. 

ps. Do not show the project to government, builders, etc until it is firmly under contract. If you want to talk to them about it, be generic in its location.

Not a lot Tron, 2-5 lots would be great. Lots splits are ideal, but not many left. Ready to close quick on the right piece(s).

thanks for keeping me in mind.

great job. Red tape is always frustrating.  

Couple questions for you.. if you have a minute.

-How did you pull permits without a GC? (most jurisdictions I have worked in require GC license to pull permits).

- Did the buyer(s) have any concerns about the home not being built by a licensed GC?

- The 8-15% profit figure you mentioned, is that a percentage of gross sales or Cash on cash? Just want to be clear so I can compare to my own numbers. 

thanks!

Regarding the "is the developer responsible for...xyz" questions. The answer is always yes. Obviously you have to dig very deep and break that yes down into all its separate components (who pays for it, who does the physical work,etc).

Regarding making money. On large tracts you will often see a developer sell padded lots to a builder. Meaning acquisition through infrastructure was all handled on the developers dime. These padded lots (definition of pad varies wildly, make sure to define in the sales contract) are sometimes bought all at once, or on a take down basis.  Take down is just short for the builder will take down (buy) x# of units per given time period (might be expressed as 3 lots per month). To be clear the developers profit in this case would come from the sale of the padded lots to the builder, minus all applicable expenses. Nothing to keep a developer from selling at another time period in the deal and making money, this was just a common example.

The builder (home builder GC) makes his money on the sale of the final product (individual finished homes) in the above example. Keep in mind that builders will also work for flat %, flat $, and other fee structures. This generally applies to most general contractors.

Generally it is the developers money on the line for a project, so the responsibility for everything always falls squarely on the developers shoulders.

Hope this helps in some way. 

Likely going to fall into A&D type lending, vs construction loan (due to the infrastructure). I can't imagine 'traditional/conventional' loans/banks being at all interested. I have contacted quite a few banks in 18' just to see who does A&D, I came up with maybe 2 names (but I am sure there are more). Relationships and past experience pay a huge part, my experience is meetings with banks can be more like interviews than you may expect.

Terms for your contract... tie up the land for as long as you absolutely can while you go though DD ,Design, Permitting.

Costs per LF of roadway are all over the place and highly dependent on numerous other factors.

good luck!

I am looking to add more agents to my network that deal with finding land. Looking in the higher end areas- Sandy Springs, Vinings, Paces, East Cobb, etc.

Need land for doing SFD where final product is in the 800k-1.7mm range.

If door knocking is your thing, I am working on consolidated lists of parcels I think are worth reaching out to.

I was under the impression he got it to rent primarily. Thought didn't cross my mind he might have bought it planning on developing it with out the obvious DD. eeeekk! BALLS is right!

Ahhh ok. Thanks! I have some other work on the table right now, but once i clear some of this crap out. I will be looking into some of these ideas asap. Thanks everyone!

About 2 years now on this forum, and I am still impressed with the quality of the members!

Wheatie, I understand they are suggesting conservation and I originally mention Ag. I'm just unsure which routes are available, so I had to throw out the best example I could think of so people would have an idea of what i was trying to accomplish. I will contact the assessor asap, as a conservation type classification might be a little tricky, but ya never know with the government. I'm going to try and pursue both routes. Thanks wheatie!

Any other ideas guys/gals?

basically what wheatie said, but slightly different. Here is a copy paste from a post of mine a couple years ago.

http://forums.biggerpockets.com/viewtopic.php?t=3243&highlight=

Posted: Thu Jul 13, 2006 9:22 am

Personally i would take a few BASIC steps, and one of them is NOT "just buying the land and hoping to get zoning and a LDP for I want"

1. ZONING- can you get what you need, density?? style of housing?? ect ect TALK to you county commissioner and/or one of the zoning heads about your intents (talk them to lunch, visit their office, give them flowers lol, just anything to get the county on your side)

2. COMMUNITY- will the community support this type of housing (talk to other developers, visit projects of similar nature preferably in the same area and price bracket).

3. PRELIM LAND PLANNING- do a preliminary layout, please remember stream buffers, specimen trees, ANY jurisdictional waters (its a good idea to have you county water systems guy come walk your property with you to verify any jurisdictional water systems and what the required state and county buffers are for those systems). Also, flood maps are great for prelim, GIS mapping, and FLUM (Future Land Use MAp) are a must look at. Also, verify ALL utilities (don't believe that dang Realtor for one min Wink ) go to the county for sewer and water. Call elec to verify that can increase capacity to withstand your development.

3.a. - Know what the county likes. Get a development standards book so you can understand what and why a engineer should do something. And just because another developer got approved for a certain style project near by doesn't mean you will. Remember standards are changing constantly, and just because that subdivision has this construction feature in it, doesn't mean you can too (doesn't mean you cant either). Did that make any sense at all?

3.b. - COE Core Of Engineers.. These people are a pain in the arse, get a good Environmental company to do your Phase 1 and any permitting you might have to do for stream crossings, wetland compensation, ect. Also, your enviro. company will delineate wetlands for you and transfer the info to your civil eng. There is some type of Core approval the company needs to delineate wetlands, not sure what it is, sry. Your civil eng. will delineate floodplain for you. If your stream free, you SHOULD be able to sleep at night :Wink:

Ok thats very basics, off the top of my head. Im not a writer, so i have my fingers crossed that it makes sense.