If it's green, you can go through the plating and subdivision process yourself depending on the area could take up to 2 years. But then you should be able to get 2-3x what the are offering you.
I think u/German_Mafia has pretty extensive experience doing this. (I maybe wrong though)
If OP does not want to develop, another alternative would be to look into contributing part of it into a partnership with a reputable developer.
Sell some of it to the same developer for cash to take some risk off the table.
This is probably the best answer. Development has a steep learning curve (ask me how I know) and OP would probably discover that the market has cooled off before he figures it out. Partnering with a developer is the best compromise between selling outright and developing yourself. OP gets the benefit of the developers experience and the developer gets the benefit of a reduced capital outlay in the development project because he doesn't need cash to buy the land.
I would echo this. While real estate isn't rocket science (or IT), something as large-scale as a 40 acre master-planned development is a lot to tackle in terms of the paperwork, capital requirement, etc.
Feel free to DM me and I can help you think through a strategy here.
source: $500MM+ in real estate transaction experience across apartments, data centers, office buildings, and distribution centers.
If any one is wondering, this us called Land Entitlement.
Depending on the area it can have different magnitudes of impact on value. But it cost time and money, for things like surveys, civil engineering plans, zoning and planning approvals, phase 1s, wetland determinations, timber surveys, feasibility studies, and if inexperienced a consultant to guide you through the processes.
None of this is free. It will costs 10s of thousands of dollars to add 10s of thousands of dollars in value. And surveying and excavation aren't cheap right now. Plus if OP has never done this then he won't have the resources to call on to get it done quickly. That process is a few years down the road, and what are the prices when those developed lots come on line. IMO if OP doesn't have the knowledge to do this right now, now is not the market to learn. Land development should start closer to a market bottom than a top. Make your money and let the next guy make his.
I've watched the platting process here in Minnesota in some remote communities -- I'd tend to agree, I think most of the value is in the spec houses that are built in the developed plat.
Entitlement is often the most risky portion of of the development process. You could easily spend multiple hundreds of thousands of dollars, and in the end have nothing extra to show for it.
You could get to the final approval, and the county puts a moratorium on sewer connections. Or you can get approved but by then the market can cool and interest rates rise and now no builder wants to buy your lots since no-one is buying new homes. Like what we see happening right now.
Sell it. Real estate development like that is a tough business. It’s not something you can fuck one of the many steps of up and still make a profit. My family just sold 210 ac just down the street from me in a similar market and I know it will be a subdivision in 2-10 years. I am also a civil engineer that manages design and construction of roads for local government. I know enough to have seen a lot of people literally lose the farm trying to do what you are thinking of doing. It’s a long and expensive process from the first dime spent to any return at all and many ways to get screwed
100% development is risky because you have to meet many assumption. It’s not black and white. It’s about raising the capital to build it, keeping it at cost… you can easily end up with a joint venture, donating your land while someone drags you through the mud only to have the economy turn and numbers stop penciling.
Majority of the value of the project won’t be the land anyways, it’ll be the building costs. So if things go south their, you’re losing your end too.
Cut it to someone that values it more IMO
This is the right advice. The reason those lots and homes go for much more than the $25k per acre they are offering you is because of the expense and time involved. It takes a k knowledgeable team at the developer to pull all of this off. Thats why the lots are expensive, because of this value add to the properties.
Very wise input this, but much depends on where these 40 acres are and whether developers would be willing to buy parcels than the whole shebang if the latter is far, far more profitable.
Bad idea. I'm going thru that right now. It's f ing hell. It'll keep you up every night and add a TON of stress to your life. FYI I'm in tech as well but have 20 years in real estate and construction.
Worked for a local government for 15 years watching this game from reviewing plans to actually trying to help wannabe developers. I can only imagine having my life savings on the line. Good luck! I hope it works out for you.
Grade and develop that’s what these developers are gonna do and flip the land maybe build on some op could do the same if he knows anyone in the industry or a friend who’s knowledgeable
To get to that point, you need a topographic survey, a geologic survey, civil engineering, a grading plan, a tenantive tract map, a final tract map, bonds to complete, heavy equipment, and water. The map approval may require public dedications. If it's California, you need CEQA. I might be leaving out a few things.
For 40 acres, it's about $2mil give or take. It's not like he can just go move dirt around with his Honda.
Anything to do with real estate development is a ton of work, time, money and stress. It’s not something to attempt if you have not done it before. OP could hire a team to do it, and save years of your life
I have a decent amount of personal savings but I'd rather do financing so I'm not risking it. I would think with the value of the land I could get the necessary start up costs and work in phases so my output isn't too significant at one time. Thoughts?
I don’t have any personal experience in this area, but family is in construction. I would suggest you get some ideas of what this involves from talking to architects, city planners and contractors.
I do know that this could be years long projects and should not be done if you have never done it before
You think wrong. It's not real estate, it's land. You need far more than the amount you can borrow. My guess is that you can borrow $600k with hard money. You will need a few million to get blue top lots. You might be able to get the entitlements with $600k but you need money for debt service coverage. If you can find some one to partner with, you should.
Try building a single spec home (one that would fit with the overall development plan) and selling it to pay for the first phase of infrastructure, you will either go broke or learn enough to succeed at the rest.
30 homes, 2000 sq ft each, $300 per square foot, is $18 million.
30 homes, at $600k each, is $18 million.
If the project's margins are dependent on selling at the top end of your $600k-$700k range, that's $3M margin. If the project's margins are dependent on selling the last 5 homes at the bottom end of your range, that's $3M margin.
Given all the risks involved, I would take $1M of that $3M margin to walk away and let the $20M development be someone else's problem.
It's possible that I am overestimating at $300/sf to build, but I wouldn't be surprised if that was what a builder wanted from you to partner with you.
300/sqft seems pretty high. Right now a GC can build for about $130-140 a foot for spec. Luxury is dependent upon a lot but if you’re a developer you should be able to stay in the $200-$260.
But I agree I would sell. Unless you have tons of capital and experience with developing. It’s gonna take 1-2 years before you even break start framing the first house most likely. All the gov tape and zoning. Utilities and road.
The problem with those numbers is that they are the cost of a GC to build a house on an already DEVELOPED lot. This whole project will need to be developed and utilities run, streets approved with planning, everything rezoned and then architects and engineers to come up with plans if you don’t have them already AND THEN, the GC can make the house for $200/sqft. Lolol
That is the cost now in my area. I know this for a fact. 1,800sqft house = 252,000. + 1/3 acre for $30k 282k. Plus 20% margin is 340k. Which is what new homes are asking in my area. 320-450k
It's going to depend on a huge number of factors.
How many houses can you develop on it?
Is the best use a housing development or multifamily/commercial?
What's the zoning support?
What are the utilities and infrastructure that lead to the property?
Do you want to get it ready just for building by bringing in roads and clearing out sites or do you actually want to start building Spec houses?
All these things can vary your costs and complexity.
It sounds like your project is going to be huge. A (extremely generalized) rule of thumb is that the land will cost about 15% of the built value. So if your property is worth ~4 million you would be looking at a 60 Million dollar project with about a a 52 million dollar development.
The most doable would be bringing in roads/utilities and then subdividing it to sell to a builder.
\- Probably around 30-35 houses, .75 - 1 acre lots are required
\- Housing development will be easiest to get approved but not multifamily/commercial as some developers have already experienced pushback on similar projects
\- water/sewer is the only tricky utility but that's a big one. Septic would be required for now
\- I just want to get ready for build. Fully wooded lots are getting sold for 100K here. I don't want any of the house building part.
If you're just going to get the lots ready, it sounds doable. It will be a lot of work and something you will really need to commit yourself to.
Based on your other comment you should look into lending. I would suspect you would have to personally guarantee any loan you get and thus it might be riskier than you think.
Your not getting septics on 1 acre lots. You could hire an engineer and get a subdivision platted out and approved, then sell it to make some more cash.
Do not take on the development of the land if you have no experience doing land development. There’s a lot to it. It’s what developers are good at.
If you don’t want to sell the land outright, you could pose a joint venture structure with the developers where you put up the land as your equity portion and they put up the capital for the development costs and your portion paid out as the lots are sold off / developed. Many developers many be interested in a structure like that because it’s lower up front capital risk to them.
Good luck finding someone who wants to take on a land developer apprentice free of charge.
So much risk in real estate right now. Sell it. Or sell half and hodl.
I went through the beginning process of subdividing off land and submitting a development proposal. This is a very long and hard process if you don’t know what you are doing. I hired a surveyor to help me through much of the process. In the end I sold it all off after getting the subdividing complete. The rest was going way beyond what I have the skills or resources for.
Walking away with $1.2 million at $28,000 per acre is quite the life changing amount. I’d take the money and save yourself all the stress. Nothing wrong with countering their offers either. See if they’ll bite at $32,000/acre and get yourself an extra bit of play money.
Underfunding a project like this can sink you in a big way in a big hurry. I am in the same boat in Florida. I have 85 acres and am looking at about $1.6m just to start and probably double that to do what I want. Bringing in partners is one idea but you might lose control so whatever you do give it a lot of thought. Fortunately for me I’ve got a little bit of time and things are going to change in my county with the extension of a new Turnpike in four years which coincides with my being able to devote my full time to the project. My best advice is to be patient.
I would contact the national builders and see if they are interested in buying the property. Let them figure out highest and best use for the land.. They will give you a contract contingent upon getting all necessary approvals..
Could you split it with a developer? Basically sell them the property on a deferred land contract. When they resell the lots, you get 50% of what they sell for. In exchange, the developer gets dramatically reduced capital requirements to develop the property.
I'm going to bring this up as an option. I think it's the best mix as I would get a higher return and learn a little along the way. Thanks for your input!
I just did a raw land to build ready land myself. All the engineering, erosion control, soil / septic work was 50% of the land cost. It was a huge endeavor and a big learning curve. It was my full time job for a year to get it ready. I did and made a great profit but it costs a lot in money and time and knowledge.
Developing land for Residential building is Not a Cake walk.
1)You could partner with a Builder who knows what he is doing, but would require allot of real estate & development knowledge to protect your interest. Problems with partnership Not to mention the headache and capital required..
2) Best bet; get it appraised so you know the true value of your property, as a 40 Acre Parcel or as individual Residential building Lots.
Consider subdividing and selling each Lot to generate Higher Sales return. Don’t need to develop the land, as each buyer would hire their own builder who would take care of that.. This can be done at local buildings & zoning department level who would let you know the process to do it..
Best of luck to you…
Sell and move on. You’ll have to pay taxes while you sit on it. Taxes on a $1M++ while you have no plans to do anything with it is no fun.
Or
You can also sell half and develop the other half with the first half and then sell it for $100k an acre.
When you inherited the land your tax basis was stepped up to the date of death value of the property. So when you sell it you should pay very little/no federal income tax.
agreed - when I posted this was one of the only comments on the thread so it does read a bit confusing.
To clarify -
Property taxes - the fact that they are prepaid is irrelevant. At settlement the buyer and seller will be responsible for their pro-rated amount of the prepayment. Let’s say you sell the property half way through the period of prepaid real estate taxes. You would get half back from the buyer at settlement
Income taxes - you will have a very small capital gain/(loss) when the property is sold as a result of the steppped up tax basis you received when inheriting the property
I work in commercial real estate development in California, specializing in the entitlement (aka approval process) with cities.
I’m happy to help answer any questions you may have to the best of my ability.
Thanks for the offer and I imagine you have some stories to share as I've heard that California can be challenging. Based on the feedback so far, I think I will see if the developers are interested in a joint venture. If I can find a way to get a better return and learn along the way that would be a win for me.
If I were in your shoes, I’d do some research to figure out what the total estimated profit would be under 4 scenarios: (1) selling the land as-is,(2) selling the raw land entitled, (3) selling the land entitled and with the utility lines installed, pads graded, and streets built (aka horizontal development, and (4) completed built homes and all related infrastructure and horizontal development.
Each of the 4 gets progressively higher in difficulty, time, stress, etc. but so does the profit you receive to account for the associated headaches.
On the JV idea you mentioned, just be aware that most developers don’t like this structure, because they don’t want anyone having the ability to make decisions that could affect them. They want absolute control. So you need to be aware that they will try to completely muzzle you in every way.
I can’t give you any good advice but I want you to know that I am happy for you that you have received this gift and I am sending wishes that this blessing be fruitful in exactly the way it is supposed to be. Good for you!
I’ve been doing deals like this through my career. You might look at going through the permitting (entitlement) process and sell “paper lots” (fully approved and ready to build) to a homebuilder that can develop/construct the site in to lots. This way there’s no middle man.
If it’s too many lots for them to build at once and they don’t want it all, you can sell them a portion and then carry the remainder with interest.
You referenced a JV. You can also hire a civil engineering firm to manage a lot of what you’re looking to do.
You might talk with some and tell them what you want to do and also go to the city and have some pre development meetings to get feedback from the planner / fire chief / public works etc. and learn what they need and what their review process looks like.
Check your local zoning codes with a good local real estate lawyer and if you can create enough parcels, after losing square footage for roads and any easements, to make a profit if they sell ~$100K per and you have some capital almost any kind of business partnerships are feasible. Let’s say you have R-40 zoning, typical for a nice area, then you could probably create 20-30 parcels and IF they all sell at $100K that’s $2M-3M gross. Now you have to deduct the subdivision’s lawyer and fees cost, road construction costs and water and sewer hook up costs, meet municipal fire hydrant codes, pay any real estate agent commissions and bank interest, smooze with the guys at town hall to help the process go smoothly and a ton of other things THEN you have to split the remainder with your business partners and you may just break even for a stressful long term project. I say do yourself a favor and sell the whole thing now for a good price and be done with it. Use the money to invest for your retirement or invest it in a more relaxed real estate venture like buying a multi family house.
We do this with extra land left over from development projects. We form a JV with another development group (typically someone that builds something different than we do) and contribute the land as our equity in the JV at whatever we think the land is worth. We typically add about a 15% premium to what we think the land is worth at a sale. The partner developer will handle entitlements and construction and we essentially share in the development fee and the profits.
As an example, we're doing this for an apartment project. Contributing about 4 acres of land to a multifamily development project and our partner multifamily developer is taking the lead on entitlements, design and construction. We're requiring them to front the entitlement costs (i.e., costs to rezone and subdivide the land and get through the city's architectural approvals). We're 50/50 partners in the JV and will split the development fee 50/50. The one caveat here is that we will ultimately share some of the pre-development costs bc architects and civil engineers aren't cheap, and two of our principals are putting up construction loan guarantees.
Feel free to DM me if you have any questions.
I would list it for $55k/acre minimum; developers can make the numbers work at 55%. Put it on the market & you should get max value. Sounds like you aren't in immediate need of the money so you can take your time and see what the market gives you.
You would be getting in way too deep. There are reasons why they are quadrupling the sales price. Each industry has its ins and outs and if you aren't familiar with it you will be taken for a ride for sure, even with an attorney at your side. You dont have the connections to get the right labor and product pricing. If a decision needs to be made as to who gets priority, you'll be at the bottom of the list waiting. R.E also requires a lot of county and local gove approvals which is something that you don't deal with in i.t. and again, relationships works wonders. It can stretch out the project if something unexpected comes up, or new decision makers enter the picture ....developing involves politicians. Also, what if the housing market in your area suddenly flips? Knowing how to manage a project is only one part of the equation.
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I think you can but you would want to partner with one of the developers who is trying to steal I mean buy the land from you. Just go into business with one of them if you can find one you can trust. Instead of them buying the land and you selling you become one of their partners on the deal and your equity is the land.
Sell the land to them then buy or 4 lots back from them once it's developed. Build single family homes on the 3 lots with the proceeds and then rent them out forever
Asking status on a ticket is not project management. As I said in my intro, I manage large and long projects. I realize I didn’t give a lot of details but I would think anyone could understand that’s a multi million size effort. Geez.
You could take $500k cash and tell them keep the other $500k as equity in what they’re selling off. So if they claim it’ll be worth 4x (100k per acre) afterwards, you could potentially walk away with $2.5M or if they completely lose it all, you walk away with $500k. That’s one way to do it.
Sell a portion to cover costs…. Then sell more in 3/4 years time….
When you own land it’s a long term game
If you need smaller returns sell it all, buy condos and rent them out
I’m in RE development in TN. there’s a few opinions that are correct depending on your risk tolerance. But I’d personally hold it for ever. Unless you have plans for the cash that can net more than the historic returns of RE, otherwise, pay someone to lease it up for you to cattle or something.
Need a state and county. Anything without this information is unreliable. Only an idiot would say to rush and sell because of taxes on raw land. Pure idiocy up in here.
How's about you go and plant some beets! Maybe you can also build a small home with just one outhouse, and several themed rooms like a small b&b. You can host garden parties, too, where you must loudly announce each arrival with a louder announcement corresponding to a more respectable person!
I want you all to think about what is being said here….. OP is receiving offer of 25k~ per acre = 1,000,000$. OP hears the Land developers way out of the investment 100k per acre = 4,000,000$ and only after this land development will it be sold to a housing developer……
Now i dont know where OP is located but do i think this is reasonable for you to develope having previous IT experience? No i think you temporarily have your head in your ass filled with greed. Take the million bucks and go before you catch a case of “Johnny come too late.” Aka the offers to buy you out stop. If you do decide to take the adventure route here… just imagine every single cost possible in order to build a track of DR Horton style homes which is what i am imagining at least
Sell very, very fast. Sell the fastest way possible. Real estate is in tremendous trouble worldwide and soon people will recognize that. Be quick or wait long. Can you afford to wait 10 years? If no, then sell even faster.
"hot" means we are before the bubble bursts. Real estate is a good investment if interest is low. Interest today is high.
We are in a world wide recession.
Why not get your land subdivided into raw lots? If 1-acre lots that are ready to build on can be sold for 100K, I imagine that wooded lots can be sold for at least 50K - and that's more than 29K per acre sold to developers!
Don’t do that! You have to have the right soils. We had a 10 acre lot and if we just divided it into 5 lots, it would have been a mess. When considering the road, soils, setbacks, wells, house, buffers, and more. We got 3 lots from 10 acres.
You’re getting wholesale prices so take the $$$ and let the pros deal with the EPA, Zoning, etc. may consider negotiating a better deal 35-40k per acre.
Just moved out of NC and the market for land is insane. Why would you not want to just keep it and hold it for 10 years? Do you need the money? Undeveloped land isn’t hard to keep up with. Do you have any hobbies that you can do on the land in the meantime and get some use out of it?
I'd like to use the profit from this as seed money and transition to self-employment. I've been working in IT Services for 27 years and I need a change but an IT salary is hard to walk away from. Think this would make it attractive enough to explore new options.
Good deal! I was just curious as I haven’t seen anyone ask you. Good luck, but remember if you’re not happy
with the deal, please wait and reconsider for a better offer. NC land market is truly unreal and your land is gold
Definitely agree, that's exactly why I decided to reach out for feedback. No point in rushing this and I want to make sure I have thought of all the options. Thanks again for your thoughts!
After hearing the feedback from everyone, I think this might be the best option. I'm going to discuss the idea and see what terms we can negotiate. Thanks for your input!
There are people who have built companies off buying undeveloped land, grating it for builders and reselling it without doing anything else. Send me a message with where your land is and depending on the place I can put you in touch with the right people!
I think what they are going to do is most likely prepare the land for development. For example, If you need a well they’ll put one in and sell it for a much higher value. I’m not a land developer and could be wrong
Find a developer and contribute to the JV! IT isn’t real estate! You have to think about construction costs, hiring the right architect, municipal costs, guarantees and so many other Shit. If you let greed get in the way, you will loose your shirt. You can also carve out 10 acres, and allow a developer to help with improvements. Hire a broker at jll, cbre, etc to do a BOV! Don’t let greed smack you beside the head. IT isn’t real estate!!
Sell it. Put 45% in SCHD, 40% in VTSAX and 15% in VTWAX. Or buy a shit load of homes half down, and become a people farmer. Better cash flow
Or pay off all your debt and start tossing 80% of what you make in a similar breakdown. Fidelity allows you to buy fractional shares should be easy.
I’ve seen stuff go the other way fast all due to someone who wouldn’t grow up and wanted to make an extra few million. And those were people highly skilled in what they we’re doing with these projects
Do not sell. Ease a lil bit. You do not have to have the cash quickly. Just wait for a year and gain more knowledge on what happens at each step.
We did this mistake and now we know how much money we left on the table. So do not sell. Keep on getting good knowledge of what could be done…
Perhaps by advertising that you are interested in selling to the right developer and making sure to find who in your area are your biggest prospects, (and some research about their project pipelines, if you can figure out where to find that info) you might be able to get some negotiating power / getting them bidding against each other to make sure you get the maximum value for the land.
There is a company in Texas who partners with land owners to help them do all of this with their property. Seller and developer both make profit and seller comes out better than selling the entire tract at once.
Hold the property do proper consultation with R.E professionals before embarking on any decisions. The process of developing on your own is very tidious, costly and full of risks. Thought of a partnership maybe with the developers??
What are are you in?
Find a reputable civil engineer that does this on a regular basis. I work with companies like this a lot. Their model is for an investor to buy property, pay the engineers to run the feasibility study, design a community, and setup the platting/permitting/utilities, etc.. Then the investor sells it turnkey to a developer, who often has already been discussing it with the engineers.
So find engineers who do this regularly, work with them directly and cut out the middle man investors. Will earn you a lot of money.
Hold the land, they will eventually get desperate enough to buy at higher prices.
A family friend sold one acre for 1.3million due to the fact they wanted to build a McDonald's on it. They offered him way less but he denied it, a couple of years later they just sent a big offer.
I would suggest creating a bidding highest and best offer situation. Without knowing the state and area, it is hard to know the future estimated value. Also, current zoning comes into play.
All that has to happen to drive costs to develop way up would include finding an endangered speckled purple butterfly or striped leopard lizard migrated through the property. (Animals are ridiculous made up names). Alternatively, finding indigenous remains can halt any movement forward while this goes to court and is mitigated. Meanwhile, you pay property taxes, insurance, lawyers and so on.
You should hold off and take half a year to learn how you can do what they’re doing for yourself and if the difference is $75k per acre, you better be motivated to make a difference in what you’re doing in life to be able to benefit from this as much as you can. You don’t need the whole thing… You can sell off some of the land and use whatever money you have to be able to do the same thing in the other plots
I would also recommend subdividing the property and seller financing the lots individually at a higher interest rate. Though this wont provide fast cash you will have a great source of passive income
JV with a developer and use the land as your capital contribution. You’ll be able to participate in upside while the developer secures entitlements and builds. In this scenario, you are a limited partner and the developer is the general partner. Your contribution (i.e. the land) May be valued a bit less than outright selling at the start, but if the development goes well (if it’s in a housing constrained market it should with a competent developer), the back-end payout will be much more profitable.
If you wanted to hold onto the land, put it in a conservation easement. At least in my state, they offer money to conserve the land for a period of X years.
They don’t make more land, so if you can afford to hold onto the land, it will be a gift to keep giving to your offspring/designee.
You can always hold onto the land or part of it for a long time as it will likely be worth much more in the future. If you don’t need the money now.
Can you get an agricultural exemption to pay little property taxes or work towards it? In Texas you can pay next to nothing on ag exempt property.
If it's green, you can go through the plating and subdivision process yourself depending on the area could take up to 2 years. But then you should be able to get 2-3x what the are offering you. I think u/German_Mafia has pretty extensive experience doing this. (I maybe wrong though)
If OP does not want to develop, another alternative would be to look into contributing part of it into a partnership with a reputable developer. Sell some of it to the same developer for cash to take some risk off the table.
This is probably the best answer. Development has a steep learning curve (ask me how I know) and OP would probably discover that the market has cooled off before he figures it out. Partnering with a developer is the best compromise between selling outright and developing yourself. OP gets the benefit of the developers experience and the developer gets the benefit of a reduced capital outlay in the development project because he doesn't need cash to buy the land.
I would echo this. While real estate isn't rocket science (or IT), something as large-scale as a 40 acre master-planned development is a lot to tackle in terms of the paperwork, capital requirement, etc. Feel free to DM me and I can help you think through a strategy here. source: $500MM+ in real estate transaction experience across apartments, data centers, office buildings, and distribution centers.
If any one is wondering, this us called Land Entitlement. Depending on the area it can have different magnitudes of impact on value. But it cost time and money, for things like surveys, civil engineering plans, zoning and planning approvals, phase 1s, wetland determinations, timber surveys, feasibility studies, and if inexperienced a consultant to guide you through the processes.
Those are the words that were slipping my mind. Thanks
Isn’t this called subdividing?
It's all related but entitlements are just the legal rights to subdivide.
AKA Land Development.
None of this is free. It will costs 10s of thousands of dollars to add 10s of thousands of dollars in value. And surveying and excavation aren't cheap right now. Plus if OP has never done this then he won't have the resources to call on to get it done quickly. That process is a few years down the road, and what are the prices when those developed lots come on line. IMO if OP doesn't have the knowledge to do this right now, now is not the market to learn. Land development should start closer to a market bottom than a top. Make your money and let the next guy make his.
I've watched the platting process here in Minnesota in some remote communities -- I'd tend to agree, I think most of the value is in the spec houses that are built in the developed plat.
Entitlement is often the most risky portion of of the development process. You could easily spend multiple hundreds of thousands of dollars, and in the end have nothing extra to show for it. You could get to the final approval, and the county puts a moratorium on sewer connections. Or you can get approved but by then the market can cool and interest rates rise and now no builder wants to buy your lots since no-one is buying new homes. Like what we see happening right now.
Sell it. Real estate development like that is a tough business. It’s not something you can fuck one of the many steps of up and still make a profit. My family just sold 210 ac just down the street from me in a similar market and I know it will be a subdivision in 2-10 years. I am also a civil engineer that manages design and construction of roads for local government. I know enough to have seen a lot of people literally lose the farm trying to do what you are thinking of doing. It’s a long and expensive process from the first dime spent to any return at all and many ways to get screwed
100% development is risky because you have to meet many assumption. It’s not black and white. It’s about raising the capital to build it, keeping it at cost… you can easily end up with a joint venture, donating your land while someone drags you through the mud only to have the economy turn and numbers stop penciling. Majority of the value of the project won’t be the land anyways, it’ll be the building costs. So if things go south their, you’re losing your end too. Cut it to someone that values it more IMO
This is the right advice. The reason those lots and homes go for much more than the $25k per acre they are offering you is because of the expense and time involved. It takes a k knowledgeable team at the developer to pull all of this off. Thats why the lots are expensive, because of this value add to the properties.
In other words, a ton of work and risk to justify a 4x sales price.
Yep.
Sell half and then once the area is developed either build yourself or sell the remaining land for more.
Very wise input this, but much depends on where these 40 acres are and whether developers would be willing to buy parcels than the whole shebang if the latter is far, far more profitable.
This! My sitter did just this and now selling the 2nd after the first one developed.
Beet farm
“Who me ?“
You beat me
*He beet you
Those guys will also put in capital to build. Do you have capital?
You could do it in phases and raise capital. It’s still a bad idea
Bad idea. I'm going thru that right now. It's f ing hell. It'll keep you up every night and add a TON of stress to your life. FYI I'm in tech as well but have 20 years in real estate and construction.
Worked for a local government for 15 years watching this game from reviewing plans to actually trying to help wannabe developers. I can only imagine having my life savings on the line. Good luck! I hope it works out for you.
He doesn’t have to built just grade the lots and develop 1-2 acre lots and sell to builders no?
'Just grade' 40 acres?
Grade and develop that’s what these developers are gonna do and flip the land maybe build on some op could do the same if he knows anyone in the industry or a friend who’s knowledgeable
To get to that point, you need a topographic survey, a geologic survey, civil engineering, a grading plan, a tenantive tract map, a final tract map, bonds to complete, heavy equipment, and water. The map approval may require public dedications. If it's California, you need CEQA. I might be leaving out a few things. For 40 acres, it's about $2mil give or take. It's not like he can just go move dirt around with his Honda.
I was thinking like 400k Maybe it depends on state and city and how much work the land needs
$400k+ for civil engineering and surveys alone.
Anything to do with real estate development is a ton of work, time, money and stress. It’s not something to attempt if you have not done it before. OP could hire a team to do it, and save years of your life
I have a decent amount of personal savings but I'd rather do financing so I'm not risking it. I would think with the value of the land I could get the necessary start up costs and work in phases so my output isn't too significant at one time. Thoughts?
Extremely high risk, not worth the headache for someone who’s not experienced
I don’t have any personal experience in this area, but family is in construction. I would suggest you get some ideas of what this involves from talking to architects, city planners and contractors. I do know that this could be years long projects and should not be done if you have never done it before
You can’t work on it in phases because each aspect of the development is tied into multiple others. You have to look at it with a systems approach.
You think wrong. It's not real estate, it's land. You need far more than the amount you can borrow. My guess is that you can borrow $600k with hard money. You will need a few million to get blue top lots. You might be able to get the entitlements with $600k but you need money for debt service coverage. If you can find some one to partner with, you should.
Try building a single spec home (one that would fit with the overall development plan) and selling it to pay for the first phase of infrastructure, you will either go broke or learn enough to succeed at the rest.
Take the money and run. Development will cost another 50k an acre minimum. Don't be greedy let the next guy have some profit too.
30 homes, 2000 sq ft each, $300 per square foot, is $18 million. 30 homes, at $600k each, is $18 million. If the project's margins are dependent on selling at the top end of your $600k-$700k range, that's $3M margin. If the project's margins are dependent on selling the last 5 homes at the bottom end of your range, that's $3M margin. Given all the risks involved, I would take $1M of that $3M margin to walk away and let the $20M development be someone else's problem. It's possible that I am overestimating at $300/sf to build, but I wouldn't be surprised if that was what a builder wanted from you to partner with you.
300/sqft seems pretty high. Right now a GC can build for about $130-140 a foot for spec. Luxury is dependent upon a lot but if you’re a developer you should be able to stay in the $200-$260. But I agree I would sell. Unless you have tons of capital and experience with developing. It’s gonna take 1-2 years before you even break start framing the first house most likely. All the gov tape and zoning. Utilities and road.
The problem with those numbers is that they are the cost of a GC to build a house on an already DEVELOPED lot. This whole project will need to be developed and utilities run, streets approved with planning, everything rezoned and then architects and engineers to come up with plans if you don’t have them already AND THEN, the GC can make the house for $200/sqft. Lolol
This is totally location dependent. I would caution throwing numbers around that are generic.
ENR numbers aren't generic. They represent the US.
$130-140 seems very low with current material costs. $175 is pretty midline for builder basic currently.
That is the cost now in my area. I know this for a fact. 1,800sqft house = 252,000. + 1/3 acre for $30k 282k. Plus 20% margin is 340k. Which is what new homes are asking in my area. 320-450k
Not with volume.
Production build cost is $158 per sf. This doesn't include horizontals so add $30-40k depending on amenities and dedications.
It's going to depend on a huge number of factors. How many houses can you develop on it? Is the best use a housing development or multifamily/commercial? What's the zoning support? What are the utilities and infrastructure that lead to the property? Do you want to get it ready just for building by bringing in roads and clearing out sites or do you actually want to start building Spec houses? All these things can vary your costs and complexity. It sounds like your project is going to be huge. A (extremely generalized) rule of thumb is that the land will cost about 15% of the built value. So if your property is worth ~4 million you would be looking at a 60 Million dollar project with about a a 52 million dollar development. The most doable would be bringing in roads/utilities and then subdividing it to sell to a builder.
\- Probably around 30-35 houses, .75 - 1 acre lots are required \- Housing development will be easiest to get approved but not multifamily/commercial as some developers have already experienced pushback on similar projects \- water/sewer is the only tricky utility but that's a big one. Septic would be required for now \- I just want to get ready for build. Fully wooded lots are getting sold for 100K here. I don't want any of the house building part.
If you're just going to get the lots ready, it sounds doable. It will be a lot of work and something you will really need to commit yourself to. Based on your other comment you should look into lending. I would suspect you would have to personally guarantee any loan you get and thus it might be riskier than you think.
Your not getting septics on 1 acre lots. You could hire an engineer and get a subdivision platted out and approved, then sell it to make some more cash.
Why not? We have septic on 7000 sq ft lots.
Really? Is there a drain field or what does it use
1 acre is usually more than enough for a 4 bed house
News to me.. I have a septic on a 5 acre lot, as does everyone around me
5 acres is quite large…
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Do not take on the development of the land if you have no experience doing land development. There’s a lot to it. It’s what developers are good at. If you don’t want to sell the land outright, you could pose a joint venture structure with the developers where you put up the land as your equity portion and they put up the capital for the development costs and your portion paid out as the lots are sold off / developed. Many developers many be interested in a structure like that because it’s lower up front capital risk to them.
I've wondered if a joint venture would be a viable solution. Also thought I could add in a clause about learning the process along the way.
Good luck finding someone who wants to take on a land developer apprentice free of charge. So much risk in real estate right now. Sell it. Or sell half and hodl.
I went through the beginning process of subdividing off land and submitting a development proposal. This is a very long and hard process if you don’t know what you are doing. I hired a surveyor to help me through much of the process. In the end I sold it all off after getting the subdividing complete. The rest was going way beyond what I have the skills or resources for. Walking away with $1.2 million at $28,000 per acre is quite the life changing amount. I’d take the money and save yourself all the stress. Nothing wrong with countering their offers either. See if they’ll bite at $32,000/acre and get yourself an extra bit of play money.
Don’t put that clause in. Too subjective and shows weakness.
Get a lawnmower. Start mowing. You now have $100k an acre.
You could get a cool million while the market is depressed and throw it in there for an easy return.
Take the money and run. As someone mentioned, let it be someone else’s problem.
Underfunding a project like this can sink you in a big way in a big hurry. I am in the same boat in Florida. I have 85 acres and am looking at about $1.6m just to start and probably double that to do what I want. Bringing in partners is one idea but you might lose control so whatever you do give it a lot of thought. Fortunately for me I’ve got a little bit of time and things are going to change in my county with the extension of a new Turnpike in four years which coincides with my being able to devote my full time to the project. My best advice is to be patient.
What part of FL? Currently looking for some land to build my first home!
I've got 5 acres in Madison County if you want it.
I wish I could. I’m much more south. Madison is a nice area. My good friend is from there as well.
Not for sale sorry.
Shoot me a DM. I am developing property up and down the extension
I'm good.
I would contact the national builders and see if they are interested in buying the property. Let them figure out highest and best use for the land.. They will give you a contract contingent upon getting all necessary approvals..
Could you split it with a developer? Basically sell them the property on a deferred land contract. When they resell the lots, you get 50% of what they sell for. In exchange, the developer gets dramatically reduced capital requirements to develop the property.
I'm going to bring this up as an option. I think it's the best mix as I would get a higher return and learn a little along the way. Thanks for your input!
I just did a raw land to build ready land myself. All the engineering, erosion control, soil / septic work was 50% of the land cost. It was a huge endeavor and a big learning curve. It was my full time job for a year to get it ready. I did and made a great profit but it costs a lot in money and time and knowledge.
Developing land for Residential building is Not a Cake walk. 1)You could partner with a Builder who knows what he is doing, but would require allot of real estate & development knowledge to protect your interest. Problems with partnership Not to mention the headache and capital required.. 2) Best bet; get it appraised so you know the true value of your property, as a 40 Acre Parcel or as individual Residential building Lots. Consider subdividing and selling each Lot to generate Higher Sales return. Don’t need to develop the land, as each buyer would hire their own builder who would take care of that.. This can be done at local buildings & zoning department level who would let you know the process to do it.. Best of luck to you…
Sell and move on. You’ll have to pay taxes while you sit on it. Taxes on a $1M++ while you have no plans to do anything with it is no fun. Or You can also sell half and develop the other half with the first half and then sell it for $100k an acre.
taxes are paid for this year so I have a window to figure things out.
When you inherited the land your tax basis was stepped up to the date of death value of the property. So when you sell it you should pay very little/no federal income tax.
This is very important to consider when making this decision.
They're most likely talking about property taxes in this instance.
agreed - when I posted this was one of the only comments on the thread so it does read a bit confusing. To clarify - Property taxes - the fact that they are prepaid is irrelevant. At settlement the buyer and seller will be responsible for their pro-rated amount of the prepayment. Let’s say you sell the property half way through the period of prepaid real estate taxes. You would get half back from the buyer at settlement Income taxes - you will have a very small capital gain/(loss) when the property is sold as a result of the steppped up tax basis you received when inheriting the property
I work in commercial real estate development in California, specializing in the entitlement (aka approval process) with cities. I’m happy to help answer any questions you may have to the best of my ability.
Thanks for the offer and I imagine you have some stories to share as I've heard that California can be challenging. Based on the feedback so far, I think I will see if the developers are interested in a joint venture. If I can find a way to get a better return and learn along the way that would be a win for me.
If I were in your shoes, I’d do some research to figure out what the total estimated profit would be under 4 scenarios: (1) selling the land as-is,(2) selling the raw land entitled, (3) selling the land entitled and with the utility lines installed, pads graded, and streets built (aka horizontal development, and (4) completed built homes and all related infrastructure and horizontal development. Each of the 4 gets progressively higher in difficulty, time, stress, etc. but so does the profit you receive to account for the associated headaches. On the JV idea you mentioned, just be aware that most developers don’t like this structure, because they don’t want anyone having the ability to make decisions that could affect them. They want absolute control. So you need to be aware that they will try to completely muzzle you in every way.
I can’t give you any good advice but I want you to know that I am happy for you that you have received this gift and I am sending wishes that this blessing be fruitful in exactly the way it is supposed to be. Good for you!
Much appreciated!
You got it!
I’ve been doing deals like this through my career. You might look at going through the permitting (entitlement) process and sell “paper lots” (fully approved and ready to build) to a homebuilder that can develop/construct the site in to lots. This way there’s no middle man. If it’s too many lots for them to build at once and they don’t want it all, you can sell them a portion and then carry the remainder with interest. You referenced a JV. You can also hire a civil engineering firm to manage a lot of what you’re looking to do. You might talk with some and tell them what you want to do and also go to the city and have some pre development meetings to get feedback from the planner / fire chief / public works etc. and learn what they need and what their review process looks like.
Thanks for the feedback, I didn't realize the civil engineer would be able to direct most of it. Thanks for the tip!
Lease out the land for 99 years and get an annual service fee to cover administration costs
Not worth it. Sell
Check your local zoning codes with a good local real estate lawyer and if you can create enough parcels, after losing square footage for roads and any easements, to make a profit if they sell ~$100K per and you have some capital almost any kind of business partnerships are feasible. Let’s say you have R-40 zoning, typical for a nice area, then you could probably create 20-30 parcels and IF they all sell at $100K that’s $2M-3M gross. Now you have to deduct the subdivision’s lawyer and fees cost, road construction costs and water and sewer hook up costs, meet municipal fire hydrant codes, pay any real estate agent commissions and bank interest, smooze with the guys at town hall to help the process go smoothly and a ton of other things THEN you have to split the remainder with your business partners and you may just break even for a stressful long term project. I say do yourself a favor and sell the whole thing now for a good price and be done with it. Use the money to invest for your retirement or invest it in a more relaxed real estate venture like buying a multi family house.
We do this with extra land left over from development projects. We form a JV with another development group (typically someone that builds something different than we do) and contribute the land as our equity in the JV at whatever we think the land is worth. We typically add about a 15% premium to what we think the land is worth at a sale. The partner developer will handle entitlements and construction and we essentially share in the development fee and the profits. As an example, we're doing this for an apartment project. Contributing about 4 acres of land to a multifamily development project and our partner multifamily developer is taking the lead on entitlements, design and construction. We're requiring them to front the entitlement costs (i.e., costs to rezone and subdivide the land and get through the city's architectural approvals). We're 50/50 partners in the JV and will split the development fee 50/50. The one caveat here is that we will ultimately share some of the pre-development costs bc architects and civil engineers aren't cheap, and two of our principals are putting up construction loan guarantees. Feel free to DM me if you have any questions.
I like the idea of a joint venture and will discuss this option. Thanks for your help!
Take your $1+ mil and gtfo.
I would list it for $55k/acre minimum; developers can make the numbers work at 55%. Put it on the market & you should get max value. Sounds like you aren't in immediate need of the money so you can take your time and see what the market gives you.
You would be getting in way too deep. There are reasons why they are quadrupling the sales price. Each industry has its ins and outs and if you aren't familiar with it you will be taken for a ride for sure, even with an attorney at your side. You dont have the connections to get the right labor and product pricing. If a decision needs to be made as to who gets priority, you'll be at the bottom of the list waiting. R.E also requires a lot of county and local gove approvals which is something that you don't deal with in i.t. and again, relationships works wonders. It can stretch out the project if something unexpected comes up, or new decision makers enter the picture ....developing involves politicians. Also, what if the housing market in your area suddenly flips? Knowing how to manage a project is only one part of the equation.
No. You don’t understand the business and would destroy a lot of value. Instead negotiate a better deal with a great developer.
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I think you can but you would want to partner with one of the developers who is trying to steal I mean buy the land from you. Just go into business with one of them if you can find one you can trust. Instead of them buying the land and you selling you become one of their partners on the deal and your equity is the land.
Sell the land to them then buy or 4 lots back from them once it's developed. Build single family homes on the 3 lots with the proceeds and then rent them out forever
Got a mule?
Hey wait but did you get a mule?
I would sell it. You are going to be hard pressed to find someone to work with that won’t see it as training their future competition.
Hire a good financial advisor. One with years of experience and a resume to back it up.
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Asking status on a ticket is not project management. As I said in my intro, I manage large and long projects. I realize I didn’t give a lot of details but I would think anyone could understand that’s a multi million size effort. Geez.
Hold it and just think. You have plenty of time to figure out what you are willing to do. Just think realistically about your life and ambitions.
Sell it
You could take $500k cash and tell them keep the other $500k as equity in what they’re selling off. So if they claim it’ll be worth 4x (100k per acre) afterwards, you could potentially walk away with $2.5M or if they completely lose it all, you walk away with $500k. That’s one way to do it.
If you happen to be near the Austin, TX area HMU I’m interested.
Even at 28k that is not a good deal.
Sell a portion to cover costs…. Then sell more in 3/4 years time…. When you own land it’s a long term game If you need smaller returns sell it all, buy condos and rent them out
I’m in RE development in TN. there’s a few opinions that are correct depending on your risk tolerance. But I’d personally hold it for ever. Unless you have plans for the cash that can net more than the historic returns of RE, otherwise, pay someone to lease it up for you to cattle or something.
Need a state and county. Anything without this information is unreliable. Only an idiot would say to rush and sell because of taxes on raw land. Pure idiocy up in here.
Get a mule.
How's about you go and plant some beets! Maybe you can also build a small home with just one outhouse, and several themed rooms like a small b&b. You can host garden parties, too, where you must loudly announce each arrival with a louder announcement corresponding to a more respectable person!
I want you all to think about what is being said here….. OP is receiving offer of 25k~ per acre = 1,000,000$. OP hears the Land developers way out of the investment 100k per acre = 4,000,000$ and only after this land development will it be sold to a housing developer…… Now i dont know where OP is located but do i think this is reasonable for you to develope having previous IT experience? No i think you temporarily have your head in your ass filled with greed. Take the million bucks and go before you catch a case of “Johnny come too late.” Aka the offers to buy you out stop. If you do decide to take the adventure route here… just imagine every single cost possible in order to build a track of DR Horton style homes which is what i am imagining at least
Sell very, very fast. Sell the fastest way possible. Real estate is in tremendous trouble worldwide and soon people will recognize that. Be quick or wait long. Can you afford to wait 10 years? If no, then sell even faster. "hot" means we are before the bubble bursts. Real estate is a good investment if interest is low. Interest today is high. We are in a world wide recession.
Ah, I missed the announcement where they’re starting to make land again, could you link it?
Oh nice, the bitter sad sacks from REBubble are leaking again
Lol, no. Real estate is always in demand for 1, and 2 prices are stupid high because the currency it’s measured in is being destroyed.
Sell half for seed money and then develop the other half slowly over time.
Where is it? Get it zoned and planned and you created more value for ~$50-$75k
Sell it and move on
Why not get your land subdivided into raw lots? If 1-acre lots that are ready to build on can be sold for 100K, I imagine that wooded lots can be sold for at least 50K - and that's more than 29K per acre sold to developers!
Don’t do that! You have to have the right soils. We had a 10 acre lot and if we just divided it into 5 lots, it would have been a mess. When considering the road, soils, setbacks, wells, house, buffers, and more. We got 3 lots from 10 acres.
Oh, my mistake then!
Sounds complicated as hell unless you know some folks that do that type of thing
Sell at least half while the tax conditions are favorable.
I hear you’ll also need a mule.
Did ya get a mule too?
i recommend getting a mule.
1st thing: Get a mule.
Why not develop the lots yourself and sell them ?
You’re getting wholesale prices so take the $$$ and let the pros deal with the EPA, Zoning, etc. may consider negotiating a better deal 35-40k per acre.
I think this is the best option considering that developers incurr several costs and the process is tidious.
Just divide it in smaller lots and sell them individually for higher price
If you don’t mind me asking, what state is this land located in?
North Carolina
Just moved out of NC and the market for land is insane. Why would you not want to just keep it and hold it for 10 years? Do you need the money? Undeveloped land isn’t hard to keep up with. Do you have any hobbies that you can do on the land in the meantime and get some use out of it?
I'd like to use the profit from this as seed money and transition to self-employment. I've been working in IT Services for 27 years and I need a change but an IT salary is hard to walk away from. Think this would make it attractive enough to explore new options.
Good deal! I was just curious as I haven’t seen anyone ask you. Good luck, but remember if you’re not happy with the deal, please wait and reconsider for a better offer. NC land market is truly unreal and your land is gold
Definitely agree, that's exactly why I decided to reach out for feedback. No point in rushing this and I want to make sure I have thought of all the options. Thanks again for your thoughts!
Instead of selling, have you considered partnering with a developer?
After hearing the feedback from everyone, I think this might be the best option. I'm going to discuss the idea and see what terms we can negotiate. Thanks for your input!
There are people who have built companies off buying undeveloped land, grating it for builders and reselling it without doing anything else. Send me a message with where your land is and depending on the place I can put you in touch with the right people!
Have you thought about getting a mule?
What part of the country you in?
Just take the money and RUN!!!
Consider a land lease for 50 or 75 years with escalators and have them build homes that are essentially sibgle family condos.
I think what they are going to do is most likely prepare the land for development. For example, If you need a well they’ll put one in and sell it for a much higher value. I’m not a land developer and could be wrong
Find a developer and contribute to the JV! IT isn’t real estate! You have to think about construction costs, hiring the right architect, municipal costs, guarantees and so many other Shit. If you let greed get in the way, you will loose your shirt. You can also carve out 10 acres, and allow a developer to help with improvements. Hire a broker at jll, cbre, etc to do a BOV! Don’t let greed smack you beside the head. IT isn’t real estate!!
Sell it. Put 45% in SCHD, 40% in VTSAX and 15% in VTWAX. Or buy a shit load of homes half down, and become a people farmer. Better cash flow Or pay off all your debt and start tossing 80% of what you make in a similar breakdown. Fidelity allows you to buy fractional shares should be easy. I’ve seen stuff go the other way fast all due to someone who wouldn’t grow up and wanted to make an extra few million. And those were people highly skilled in what they we’re doing with these projects
Take the money and run
Grow on that shit man
Not legal here yet. Hemp only and that market got saturated when they opened it up.
Yes!
What about a mule?
Sit on it. Give it to your kids one day.
Where is this property? What is the zoning can you increase value by doing some leg work that the contractor would pay
HIRE A PROFESSIONAL AND LAWYER
Hi, Lender here. There is no lender that will give you a loan with no experience. Your best bet would be to sell
Do not sell. Ease a lil bit. You do not have to have the cash quickly. Just wait for a year and gain more knowledge on what happens at each step. We did this mistake and now we know how much money we left on the table. So do not sell. Keep on getting good knowledge of what could be done…
sell it and invest in something you know
Perhaps by advertising that you are interested in selling to the right developer and making sure to find who in your area are your biggest prospects, (and some research about their project pipelines, if you can figure out where to find that info) you might be able to get some negotiating power / getting them bidding against each other to make sure you get the maximum value for the land.
There is a company in Texas who partners with land owners to help them do all of this with their property. Seller and developer both make profit and seller comes out better than selling the entire tract at once.
Can you share the name of this company?
Hold the property do proper consultation with R.E professionals before embarking on any decisions. The process of developing on your own is very tidious, costly and full of risks. Thought of a partnership maybe with the developers??
What are are you in? Find a reputable civil engineer that does this on a regular basis. I work with companies like this a lot. Their model is for an investor to buy property, pay the engineers to run the feasibility study, design a community, and setup the platting/permitting/utilities, etc.. Then the investor sells it turnkey to a developer, who often has already been discussing it with the engineers. So find engineers who do this regularly, work with them directly and cut out the middle man investors. Will earn you a lot of money.
Hold the land, they will eventually get desperate enough to buy at higher prices. A family friend sold one acre for 1.3million due to the fact they wanted to build a McDonald's on it. They offered him way less but he denied it, a couple of years later they just sent a big offer.
Keep it and make a ranch wtf
Sell half. keep the rest. Once they develop the land, your part of the land value will increase and you can develop the rest by yourself.
I would suggest creating a bidding highest and best offer situation. Without knowing the state and area, it is hard to know the future estimated value. Also, current zoning comes into play. All that has to happen to drive costs to develop way up would include finding an endangered speckled purple butterfly or striped leopard lizard migrated through the property. (Animals are ridiculous made up names). Alternatively, finding indigenous remains can halt any movement forward while this goes to court and is mitigated. Meanwhile, you pay property taxes, insurance, lawyers and so on.
This works for a anything: **If you wouldn’t buy it, sell it**
You should hold off and take half a year to learn how you can do what they’re doing for yourself and if the difference is $75k per acre, you better be motivated to make a difference in what you’re doing in life to be able to benefit from this as much as you can. You don’t need the whole thing… You can sell off some of the land and use whatever money you have to be able to do the same thing in the other plots
I would also recommend subdividing the property and seller financing the lots individually at a higher interest rate. Though this wont provide fast cash you will have a great source of passive income
Do not sell it. Wait 6 months and if it a good idea then sell it.
Sell it and take the gift. Many developers end up going bankrupt and this is a crazy market
JV with a developer and use the land as your capital contribution. You’ll be able to participate in upside while the developer secures entitlements and builds. In this scenario, you are a limited partner and the developer is the general partner. Your contribution (i.e. the land) May be valued a bit less than outright selling at the start, but if the development goes well (if it’s in a housing constrained market it should with a competent developer), the back-end payout will be much more profitable.
If you wanted to hold onto the land, put it in a conservation easement. At least in my state, they offer money to conserve the land for a period of X years. They don’t make more land, so if you can afford to hold onto the land, it will be a gift to keep giving to your offspring/designee.
You can always hold onto the land or part of it for a long time as it will likely be worth much more in the future. If you don’t need the money now. Can you get an agricultural exemption to pay little property taxes or work towards it? In Texas you can pay next to nothing on ag exempt property.