All Forum Posts by: Jamie Hora

There is another type of project feasibility that should be explored if you have not already.  I work with developers on similar size projects, either SF/MF/Commercial, etc, but the engineering "due-diligence" is a key in determining the overall project feasibility. 

I am a Civil Engineer & perform due-diligence studies for clients and the basic things to be checked are: 

- Zoning.  If you have a site plan, making sure your site plan fits within the zoning criteria for lot width, depth, side yard lots, etc.  If you dont have a site plan, this is the necessary starting point to determining how much you can fit onto your site. (Unless you plan on doing a Planned Development to slightly modify zoning standards).

- Floodplain classification

- Utilities. What are available to your site & do any City utilities needs to be extended for serving your development.

- Stormwater/Drainage Requirements. Will the City require detention? Very important to know because this often is not anticipated by developers and eats up developable acreage for the need of a detention pond.

I dont have the experience to comment on your question about potential returns, lending, pro-forma, building expectations, etc.  But if you have any questions about engineering or what I touched on, let me know!  I've done a handful of developments in DFW. 

In your "construction cost", is that including development of the land, I.E. cost of roads, site grading, utility infrastructure.  Those are not negligible costs, especially if the site required retaining walls or hauling dirt in/out.  In the same realm of the site development, will detention be required? This is a big factor if your tract isnt large enough, because the detention requirements can eat away at acreage.

I definitely agree with @Pavan Sandhu.  I've only been active on here for a couple months and have seen a few other similar questions like this discussed just in the recent months. My best suggestion for your team is speaking with someone who has done a similar size development to this in your region, and also a Civil Engineer. 

The Civil Engineer can perform a due-diligence review on the site before going with a full contract for design. The basic questions that need to be answered during due-diligence that can have a significant impact on your project are:

1. Fully understanding the zoning/lot requirements & performing a site layout. You obviously want to know how many homes you can fit & on what size lots are required. The shape of the tract sometimes can hinder how many homes you can develop when you include a street layout. (I would include understanding the floodway & floodplain boundaries in here as well).

2. Are City utilities available for your site, if not, would you the developer be fully responsible for the cost of extending Water/Wastewater to your property?  Sometimes a City will cost-share this b/c they want development to occur in an area of town.

3. What is site topography?  Will retaining walls be needed? Will the site require large amounts of dirt to be hauled in or hauled off the site?  (This can also affect the depth of your sanitary sewer and depending on the answer to #2, could require the development to have a lift station)

4. Another HUGE factor is the stormwater requirements of the City. Will the City allow you to have runoff from the site? The most impactful question, will detention be required?  I had a project, 14-acres of single family homes, that the developer was adamant that no detention would be required. However after a year of trying to get the City to accept this & the hydraulic analysis, they would not. They enforced a detention requirement. The developer lost 3 lots that were converted to detention pond, a huge chunk of their profit.

Sorry I do not have any advice to offer on the Pro Forma, that is out of the realm of my experience.  But I hope this helps some!

I dont think there is a very simple answer to your question.  If you are wanting just back of the napkin, the best way would be to find someone locally who has completed projects similar to the size of what you are looking at and have their experience be a point of basis.

In general you will have the soft costs: Surveying, Entitlements, Civil Engineering, Geotechnical Testing.  

For hard construction costs, you really need a preliminary site plan for esimtating cost. If you get an engineer/architect involved to create a preliminary site plan, these questions below can be answered.  Main factors for the development costs:

1. How much linear footage of roads will need to be installed. (Length of watermain & san swr usually correspond 1:1 with length of road).

2. Are water/sanitary mains existing at the boundary or frontage to your site? If not, will the developer be fully responsible for extending City services, or will City cost-share in this. 

3. What are the existing grades & topography of the site.  Will retaining walls be needed? Will dirt need to be hauled in or hauled offsite?

4. What is the stormwater/detention requirement for the jurisdiction. Can the site flow water directly offsite (highly unlikely)? Is detention required? If so, the space of a detention pond needs to be included as a reduction of the acreage you have available for developing. 

If you have a preliminary site plan with those answers, you should be able to request some general estimates from contractors. Depending on the level of information provided, expect their numbers to be inflated. 

Hope this helps get you on the right track!

I would second much of what @Paul H. has mentioned.  While you CAN go directly to the City Planning/Zoning dept, depending on the city & who you speak to, you may get someone who only gives you a few minutes of time, short answers, etc.  My thought is it's best to do some research on your own first, to gain as much understanding as you can with the City zoning code & criteria.  That way you can also ask more intelligent questions when having a conversation with someone from the City.

Good Luck!

Hi @Nick Harz!  Here are a few of my thoughts.  These are opinions from a Civil Engineer, who works with developers on subdivisions and commercial/retail developments.  I'm only commenting on a few of your questions, the ones where I think my input can also compliment the comments already made. 

1.  You can likely replat to create new lots.  The key things to consider here are within the zoning codes that dictate your minimum lot widths, depths, side yards, square footage, etc which will determine how many lots you can fit within the site.  Understanding the zoning code and then reaching out to someone in the City Planning and Zoning department is a must for this item to make sure you are understanding the zoning correctly and for them to offer comments on anything additional!

2.  See answer #4 for potential affect of creating a subdivison.

4. I do not know if property is nearby other development, or is perhaps a few miles outside other homes.  But, additional due diligence should be done with an engineer.  Things to know are if the City water/wastewater utilities are existing along the street frontage. Floodplain should checked.  And, if you become classified as a subdivision, you will need understand the Stormwater/Drainage requirements.  This can be a big item depending on the jurisdiction.  For example, they may require you to provide detention, and in which case that can potentially take a full lot away from you.  I would discuss this with the City Development or Engineering department to know the affect of becoming a subdivision and what the stormwater/drainage requirements will be.  Then, depending on their answer, you may need to get an engineer involved to begin working on possible sizing of a detention pond or some other form of accommodating the drainage requirements.  

Zoning criteria is something that should be considered.  Maybe you already have looked into that, and these are the two options you have narrowed down to.  But, if you havent, you should check the zoning criteria.  Not only does it tell you the single family, multi-family class, but the more detailed criteria is what may be helpful for you.  Things like the side-yard setback requirement and the max building height are two of the criteria that could impact your decision.  These may factor in to how large and the shape of the building you can fit and perhaps give you a more clearer answer if one or the other fits better for your exact lot. 

Thanks for a well written breakdown @Amit Dhawan!

Definitely as Emilio said, the City Zoning dept is the best place if it is your first time doing it.  You should also be able to find the Zoning on a City Map via their website.  Then after seeing the zoning code on the map, you can open the City Zoning Ordinance and find said zoning.  There you will find a thorough description about businesses that are/aren't allowed, lot setback requirements, min/max size of building, etc. 

My advice would to fully understand the zoning code and what R3 will allow you to build. Then talk with an architect to come up with a preliminary plan on what can be done within the zoning restrictions and your lot size. Assuming you're able to come up with something that is desirable for you,  then definitely a meeting with the City planning & zoning departments.  Similar to Will's point about going through the project and then making no money, you also want to get initial feedback from the City and see how receptive they will be to your plan.  For individual lots like these (*which I do not have much experience), I presume if you are adhering to everything within you lot's zoning, the City is required to approve your plans.  But it doesn't hurt to keep them apprised and get on their good side before moving too far along on the project.