Land Development Process

ONE

Feasibility

TWO

Acquisition

THREE

Zoning

FOUR

Financing

FIVE

Construction

SIX

Marketing

ONE

Economic Feasibility

The first step of raw land development is to determine its economic feasibility. Like any real estate investment, it’s critical to determine your desired return on the property before getting started. This is important because it will not only lessen the uncertainty of the market, but it will also provide a model of the costs versus profit aspect to your investment. Although the numbers will simply be an estimate, understanding these numbers can be tricky. With our experience, we can inform you about hidden costs or surprise expenses.

TWO

Acquisition

Once we understand the costs were likely to encounter—including what we should receive in return—we can better determine the offer price. It’s important for investors at this stage of the process to have contractors submit actual bids for the project. This will not only provide estimated costs for the project, including the numbers of what you’re expected to spend, but also a max offer price. With in-depth market knowledge and research, we will ensure you are not overpaying for the site.

THREE

Zoning

Stage three of raw land investing deals primarily with the design of the land. In essence, this pertains to what type of property should be constructed on the parcel, including taking a look into local zoning codes.
Depending on the type of property you’re looking to construct, or how you intend to present the property to buyers, zoning will play an important role in how you proceed. Zoning codes will essentially determine what types of properties—whether single-family, multifamily, condominium or commercial—can be built on the lot. As an investor, this could ultimately hinder your investment approach. When getting started in raw land investing, it’s vitally important to understand the zoning laws in the area. We will help to understand these laws and also facilitate meetings with the city to ensure a smooth rezoning if needed.

FOUR

Financing

Like all real estate investments, the way in which you intend to use the property will dictate the type of financing you obtain. The one aspect investors should care the most about is the loan-to-cost ratio (LTC). In essence, the LTC is the amount of money the lender will provide for the project, which will generally depend on the type of construction and use of the property. Although the majority of lenders will only provide a percentage of the overall costs (generally between 80-85 percent), owner-occupied homes are eligible to get standard bank financing. We will introduce you to industry-leading lenders and financiers to ensure you are receiving terms satisfactory to you.

FIVE

Construction

The second-to-last stage of the raw land development process is construction. In most cases, this will consist of horizontal development—like grading for roads, curbs and utilities—and eventually building the property from the ground up. One element investors also need to be aware of is the construction financing aspect of the project. Generally speaking, contractors will be paid in increments of duties performed, including phases of the project. In many cases, construction lenders will hold back approximately 10 percent of the construction loan until the project is completed. Usually pre-sold units will help to expedite the release of monies from the lenders. We will help with the design of the project to ensure it is attractive to our target audience.

SIX

Marketing

The final step to the land development process is marketing with the help of our project marketing company, Evernest. This is where stage-one is of critical importance. Researching the neighborhood, the market price, and absorption rates will pay off when determining your marketing strategy. We will take care of the branding, marketing, signage, press releases, launch events, the presentation centre, and reaching out to our wide spread network.

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