@Jon Klaus So far, the only money spent was on keeping my lawyer on retainer to help me deal with the water districts easement request and to avoid violating the current easement we have with the city. We spent $500 at the beginning and $500 this past week, it's worth it so I can sleep at night. The feasibility study costs $1000 plus the new exhibit I will be requesting ($150-$500).
UPDATES:
Water Distric Easement Request
We met with the water district representative at our laywers office this past week. They have found a way not to violate the current easement agreement that we have with the city. They would not be paying any renumeration for the easement, BUT as a bonus, they told us that since we are both at the planning stages of our projects, that we could ask the engineering firm that's currently working on a feasibilty study to design how we would want to place the water line on our land. To have them come up with the exhibit to move the water line further in so we wouldn't have to pay to move it in the future as part of a development project. This would not cost us anything since they are already in the process of doing it and they would only have to go in a few more feet, saving me over $10,000 in the future ($18 / foot). The representative even knows the engineering firm lead. He told me exactly what to tell them and to have them call him if they have any questions. We still have time to add this to the new agreement we will be signing soon. :-) I'm so glad this is working out.
USDA Rural Development
We met with the USDA Rural Develoment grants expert at the university. They offer free services for writing grants and developing business plans to the community. We talked about what my plan with the land was, which is developing multi family units for medical students and professionals and my options.
Option 1 - Multi Family Unit Development
He said that more than likely I wouldn't qualify for a grant because I plan to use it as a commercial investment, but that I could possibly a USDA guaranteed loan. He gave me a list of local banks that do this on a regular basis and know all the ins and outs of those loans. In this scenario, I would have to have Bigger Pockets, pun intended, to be able to put the necessary down payment and to plan for the first few months of renting expenses. From the meeting we had with the architectural firm, a rough estimate is 6.5M for about 100 units. I would probably have to find an investor with big pockets to go in with me or to sell to a developing company, the big dogs around here.
How does the average Joe, without big pockets realistically start on a multi family project like this? I see so many units built all the time, I find it hard to believe that everyone had to be a developing company as a requirement. They had to start somewhere, didn't they?
Option 2 - Residential Lots for resale
Since the land is in a USDA eligible rural area, that a USDA loan would allow for me to develop the land into residential lots for resale. This wouldn't demand so much out of pocket. We didn't know it at the time, but with what the water district willing to put in the water line in the way we would need it in the future, sounds like this option is beginning to be more feasible. I believe I could get 6 lots per acre x 10 acres, that would be 60 residential lots. Or I can possibly leave some commercial property in the front facing the 107 Hwy and develop residential lots in the back. We'll see what the feasibility study says.
Feasibility Study
We received a call from the engineering firm and they've been contacting various entities/agencies in relation to the land. They are still in the middle of it. I still need to share the information I received from the water district so they can work on that exhibit too.
I'll keep you posted on their findings.
