Raw Land Development: A step by step overview

Ever wondered how to develop a piece of raw land?

If you're interested in developing raw land, then you need to know the process involved. In this blog post, we will walk you through the step-by-step process of raw land development. Keep in mind that this is a general overview - each project may be different depending on the specific property and its location. Let's get started!

Know your Demographics - The first step is understanding the demographics of the type of development you're wanting to create. Is there a need for your product? For example, if you'd like to develop a residential subdivision, you should have a very clear picture on current real estate trends in that area, current lot prices, desired lot sizes, and how quickly lots are selling.

Site Acquisition - Now is not the time to purchase the property, but put it under contract with the option to purchase at a future time; typically 90 or 120 days from the signing of the agreement. It should be enough time to complete your due diligence and secure permitting (or at least know it will be permitted) before finalizing the purchase of the land. You don't want to end up purchasing a piece of land you can't feasibly develop!

Due Diligence - Skipping this step could spell disaster and financial ruin if not done properly! Did I mention that this is crucial to your development? Start with researching the zoning, environmental factors, and other potential obstacles that could impact your development plans. Some of the items to be considered are:

  • Topography
  • Good soil (not rock or muck!)
  • Availability of utilities to the project.
  • Wetland identification
  • Endangered species on site
  • Stormwater management
  • Zoning
  • Existing easements or covenants
  • Environmental Issues

It's always helpful to sit down face to face with the local approval agencies and utility companies discuss your plans. You'll want to get a clear idea of what you can and cannot do on the property before moving forward.

Feasibility - Knowing what the constraints may be, it's time to put together a financial plan to insure you'll have a profitable project. This includes running the numbers on different development scenarios, testing the market for your product, and getting an idea of what it will cost to develop the land.

Planning - Once you've done your due diligence, it 's time to start putting your plans on paper. This is where you'll need the help of a civil engineer, and/or land planner. They will help you to create a site plan showing all proposed buildings, roads, parking areas, landscaping, etc. In addition to the site plan, they will also prepare drawings and specifications necessary to complete your project.

Permitting - Once all the necessary plans have been prepared, it's time to submit for permitting. Depending on the property, there may be several permits required through several approval agencies such as local planning/zoning, DOT, ADEM, or possible even the Army Corps. of Engineers.

Construction - Once your project has been permitted, your free to start construction. You'll typically want to start negotiating with one or more contractor during the design phase of your project. Not only might they have valuable input during design, but they'll be more prepared to submit a final bid, having studied the plans during design.

Marketing - This is the final step in your development process. It's time to implement your marketing plan based on the demographic research you completed at the start of the project. This may include working with a realtor, advertising online, or even on social media.

In summary, developing raw land takes quite a bit of work, but can be a very profitable endeavor if done correctly. Be sure to do your homework, put together a good team of professionals, and always think long term!


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