Long story short, I have 60 acres under contract on the East side of Van Alstyne, TX (about 6-7 minute drive from downtown Van Alstyne). No flood plain. Great frontage road access.

The idea is to develop into one acre lots and sell them to end user or builder. Bring your own (Approved) custom builder with limited deed restrictions just to ensure no trashy lots/houses. This is my first go around as the operational partner and I am wondering if there is anyone that can help advise me on this deal, in particular a good idea of the market value of one acre lots in this location as data seems to be all over the bored and some other particulars as far as the development process goes?

Edit to add:
- This property was purchased mostly off market (combination of three parcels) so we have the property for $47,746/acre for the raw land. Market in this area from what I am seeing is $55,000-$60,000 an acre on larger properties and of course that number goes up the smaller the parcel.

- We do have approval to do half acre lots on half of the project but are not sure of the demand for that size out here. We know the one acre has been done over and over with steady demand.

No advice due to lack of experience in this, but good deal and best of luck to you!

Let alone the market study implied above, have you had any kind of feasibility study done on the property for your intended use? Would it even be permitted? Is there available water/sewer/power/other utilities to support that use? What kind of costs could be associated with extending those utilities? What are the associated costs with on site improvements?

I could put you in touch with a qualified engineer if you haven't done that yet and you're interested.

TxAG#2011 said:

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You really should know the value of these lots before you have that land under contract. There is serious capex involved getting those lots ready for take down from a builder easily in the multi million dollar range, not to mention a lengthy approval process from local planning board.

My dad has been a subdivision developer up there for over 30 years and is getting out of the business given how much of a total pita the process has become. Expect a lawsuit at some point also

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We have a decent idea. I live in Van Alstyne on the West side of HWY 75. I see lots on the West side listed for $220,000 (chip seal roads) for a finished one acre lot, and on the East side (where our project is located in the county) the highest I have seen is a one acre lot subdivision (with concrete roads vs chip seal roads) selling for $190,000-$200,000 a lot and only being on MLS listed for a month before sale. I have talked to a few realtors but they are honestly all over the place with their answers and don't seem to really have a clue.

Is there a better source that anyone would recommend for determining value than just what I am seeing online?

I have an engineer that has provided us a concept with boundaries and then general lot and road layout. I have tried to get very rough bids on earth work, paving, water lines, etc based on that concept plan and rough linear footage of the roads and water lines needed but no one can really give me much of an idea until they have the civili engineering to bid off of which makes sense.

My biggest question would be, do people normally pay to have the engineering done during the option period so that they can get actual bids on trades before earnest money goes hard? If so that will be another $30,000 or so spent during the option period but I would think that is a critical piece to understanding if this is worth doing or not.

Thanks for any insight.

normaleagle05 said:

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Let alone the market study implied above, have you had any kind of feasibility study done on the property for your intended use? Would it even be permitted? Is there available water/sewer/power/other utilities to support that use? What kind of costs could be associated with extending those utilities? What are the associated costs with on site improvements?

I could put you in touch with a qualified engineer if you haven't done that yet and you're interested.

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Yes we have. We have water and electric and have a good idea of what the costs associated are to bring them to us and then install internally. Sewer is septic so that will fall on the builders/end users. We wanted to do a play in the county as it is the simplest when it comes to requirements like roads, no sewage, etc. There seems to still be a strong demand for folks fleeing Frisco, Mckinney, Plano, Prosper, and all the other suburbs to just move out a little ways and have an acre.

You have it under contract so I assume you are buying at the market value area. Drainage outfall and possible detention are important but I haven't seen mentioned. Close on the property and get a subdivision plat done by an engineering company already working in the county. Then get it approved by the county commissioners court.

Avoid partnerships with contractors. If you don't have funding to do the improvements, don't get into the businesss.

Mas89 said:

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You have it under contract so I assume you are buying at the market value area. Drainage outfall is one thing important I haven't seen mentioned. Close on the property and get a subdivision plat done by an engineering company already working in the county. Then get it approved by the county commissioners court.

Avoid partnerships with contractors. If you don't have funding to do the improvements, don't get into the businesss.

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It's three different parcels that I have pieced together, two off market, our cost basis is $47,746/per acre on the raw land and market I am seeing listed (for no flood zone properties) is around $55,000-$60,000/acre.

Yes that is a big question I have is the drainage/detention. I am anxious to understand how that will affect our lot numbers. I am unsure if that is something we figure out during option period or after we close with engineering.

I forgot to mention, we have already been approved by the county to do half acre lots on half of the 60 acres if we wanted to but I am thinking that may be a stretch out there.

Aggie118. I'm very familiar with this area. I have a fried that lives on about 11 acres very close to where you are talking about and a friend of the person who just built one of the biggest homes in Texas fairly close to where you are talking about. I am general counsel for a real estate investment/development group in the North Texas area. It doesn't look like you have your contact information listed. Let me know if you would like to discuss offline.

Aggie118 said:

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My biggest question would be, do people normally pay to have the engineering done during the option period so that they can get actual bids on trades before earnest money goes hard? If so that will be another $30,000 or so spent during the option period but I would think that is a critical piece to understanding if this is worth doing or not.

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The big developers have engineering companies that have made lots of money working for them in the past and will provide some free estimates to get the job.

Bad developers, set up a LLC, borrow money, buy land, then hire engineering, then declare bankruptcy (again) when the engineer identifies big problems.

In your situation, I'd pay a small engineering company the $30k to put together estimates on development costs. They should be able to estimate your per-lot-cost based on previous work or very basic estimates. If you buy the land and go to develop, that engineering company will be $30k ahead on the other engineering work you will need.

Got it if you want to take it down.

Quote:

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I forgot to mention, we have already been approved by the county to do half acre lots on half of the 60 acres if we wanted to but I am thinking that may be a stretch out there.

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If you're planning on private septic on each lot I'm pretty sure they have to be at least one acre lots.

Selling lots to individuals is a hassle. You are better off putting the lots under contract to one or two homebuilders.

You can do half acre lots in the county/ETJ with approval and using drip system septic. Yes we are considering doing that as well and just selling to builders.

I have been doing this for 20 years. If you want to talk through everything, happy to help. Just private message me.

Omperlodge said:

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I have been doing this for 20 years. If you want to talk through everything, happy to help. Just private message me.

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Unfortunately I do not have that ability. Please send me an email if you would.

Firmfoundationoutdoors@gmail.com