Land Development Startup

[JacKnight21]

2 townhomes on 7000 sqft parcel profit of 450K per townhome if you can do this just repeat this as many times as you can. Even if your including the 400k property as profit. 250K profit per townhome is juicy even in the 1m-1.5mil price range.

[Emperor]

The problem you will have in California is getting everything approved to build a building. I know people who wanted to build 1 house on a large lot in the middle of nowhere in SLO county and it took close to five years to get everything approved. Butterfly studies, Tree growth studies, Water Table studies, etc. etc.

Also with as little cash as you will have, you need to do these one at a time Id think. Carrying costs can eat up any profit and leave you in a cashflow crunch if you end up holding the property for any time. I know it is California, but even cheap million dollar homes take awhile to sell sometimes.

I know a couple of other builders who tried building spec homes in different areas. First time they had to hold a house for 6-12 months to get it sold, they went back to contractor work because of the stress.

[majesty2009]

[ QUOTE ]
The problem you will have in California is getting everything approved to build a building. I know people who wanted to build 1 house on a large lot in the middle of nowhere in SLO county and it took close to five years to get everything approved. Butterfly studies, Tree growth studies, Water Table studies, etc. etc.

Also with as little cash as you will have, you need to do these one at a time Id think. Carrying costs can eat up any profit and leave you in a cashflow crunch if you end up holding the property for any time. I know it is California, but even cheap million dollar homes take awhile to sell sometimes.

I know a couple of other builders who tried building spec homes in different areas. First time they had to hold a house for 6-12 months to get it sold, they went back to contractor work because of the stress.

[/ QUOTE ]

You should have no problem getting this approved in Carlsbad. I currently have a project going to put 6 units on an acre of land in El Cajon. San Diego is encouraging affordable housing and it should go right threw. Appartment conversion is slow but what your talking about should be no problem.

[Grasshopp3r]

I am an appraiser in Colorado and I have lots of experience with land development. I would advise you to find some partners if you are new to the business. There are many things that can go wrong with land development. Likewise, there are plenty of opportunities. PM me if you would like to talk.

[Esection]

it was my understanding that land never depreciates. am i totally wrong here, or is there some truth to this statement?

[elus2]

[ QUOTE ]
it was my understanding that land never depreciates. am i totally wrong here, or is there some truth to this statement?

[/ QUOTE ]

Sometimes it goes up, sometimes it goes down. Take for instance the following graphic take from here



Note the dip in real prices the last few months of 1982 and at the start of 1991.