This is the deal... I'm in LA Cali and grandma just gave me some land in Lancaster (about 1hr away, developing city)...I'm told water and gas connections are near....the rought quote for building was approx $100 per square feet.....its about 7 acres, and the property profile we did estimated that thirty homes could be built on the space...does anyone have any advice, or precautions I should take while researching this process????? Would it be benifitial to form an LLC, corporation or some other type of company to build rather than trying to use or personal credit???? Any and all advice would be appreciated.
Real Estate Advice Needed
- Thread starter clarence
- Start date
clarence said:
Can't help you much on the building side but on the financing side you should definetly start an LLC. The LLC will help you out for tax purposes as well as liability purposes. If anyone gets hurt or sues you because of the property they will not be able to get at you personally.
(Caveat: being that this could potentially be a multi-milliondollar project I would definetly seek a lawyers advice in california about business formation if I were you)
What would end up happening in the LLC situation is that you would deed the land over to the LLC (which you own 100% of). The LLC now has 7 acres of land as an asset (don't know the value of the land). The LLC would get a construction loan to finance the construction using the land as collateral. As long as you own the land free and clear this is a slam dunk as far as financing. You may have to do one lot at a time depending on the value of the land vs the value of the houses you are trying to put there.
If you don't have anyone to put in the houses right now what you are building is called a speculative property or a spec house. You are building the house in the hopes that someone will buy it from you or rent it out. Even with the LLC you will have to guarantee the loan personally yourself so your personal credit will come into play because it is a newly formed LLC.
This is a major project and If I were you I would get as much professional advice on it as possible. You are going to need surveys sight planners. You are going to need people to handle permits you are going to have to check zoning.
There are companies that will develop the land for you for free and then at completion you and the company split the profits. This would take the least amount of work on your part because they will handle all the headaches but it will also cut your profit margin significantly. It all depends on your level of expertise.
If it was mine I would go about developing a housing complex either town homes or luxury apartments. Instead of having 30 quarter acre lots I would put it on the whole property depending on the design you could have close to 200 units. 200 units at $500 per month (lowball number) makes you 1.2million a year in rent. The rent you would get would make you comfortable for a lifetime and in 20 years you'll own the land and the buildings free in clear so you can pass it down to your grandchildren. Maintaining generational wealth.
Thanks for your imput. Im only 22 yrs old trying to retire. If anyone knows of any companys in Southern Cali that would help take some of the headache out of the building process, I would appreciate some contact info. I am concerned about the profit for the project, but if I could net enough to seed several other smaller projects, retire grandma, and quit my bullshit 9-5 then I would be happy.
Two other things you may want to look at.
Lumber or pine straw harvesting.
Hunting use.
Farming Use.
My grandma has some undeveloped land in Virgina. Recently my mom found out she was giving people to harvest pine straw for like 15 dollars an acre. Letting people hunt on her land for like 50 dollars a season. Letting people farm on her land for like 50 dollars a month. She had no idea what this stuff was worth.
Depending on the size of the land and the type of trees lumber and pine straw harvesting contracts can be very lucrative. No bullshit out here in NC we had a guy shoot another guy in front of his son because he was harvesting pine straw on property he wasn't supposed to. The guy who shot him had paid 100k for the rights to harvest pine straw in that area.
Also hunting and farming. You can rent the land out for hunting and farming purposes without having to develop anything or spend any money.
You also want to do a thourough inspection of the land and get it surveyed you want to make sure you don't have any squatters or that no one is taking your lumber illegally.
Good luck.
Lumber or pine straw harvesting.
Hunting use.
Farming Use.
My grandma has some undeveloped land in Virgina. Recently my mom found out she was giving people to harvest pine straw for like 15 dollars an acre. Letting people hunt on her land for like 50 dollars a season. Letting people farm on her land for like 50 dollars a month. She had no idea what this stuff was worth.
Depending on the size of the land and the type of trees lumber and pine straw harvesting contracts can be very lucrative. No bullshit out here in NC we had a guy shoot another guy in front of his son because he was harvesting pine straw on property he wasn't supposed to. The guy who shot him had paid 100k for the rights to harvest pine straw in that area.
Also hunting and farming. You can rent the land out for hunting and farming purposes without having to develop anything or spend any money.
You also want to do a thourough inspection of the land and get it surveyed you want to make sure you don't have any squatters or that no one is taking your lumber illegally.
Good luck.
You need to have a market study done so that you will know what, if any, demand there will be for your houses/apartments/condos. While the area may be growing, you need to know if its growing towards your plan -- that is, what price range will be your development and is there a demand for that range where the property is. A market study will take in all of the demographics (negative and postive) affecting your location. Don't trust that movie adage: "if you build it, they will come." If you know waht the demand is, you can build to suit the demand -- instead of building something nobody really wants.
QueEx
QueEx
QueEx said:
Pretty good advice, a few years ago I bought 15 acres from a buddy of mine who had got strung out on dope, the land was a lot like the property you described, out of the way, undeveloped. I thought I would hold it and maybe build a dream house on it someday but as luck would have it Honda decided to build a auto plant in the city and land prices went thru the roof so my advice would be do your homework, find out as much about the area as possible.
I really appreciate all the advice you guys are offering up....We sat down and spoke to a builder yesterday, but I think I am leaning towards a larger scale operation. I might solicit a devoloping company to take control of the situation, but I am kind of scared of getting fucked. I know the profits would be less, but that $$$ can seed the 3-4 other developments I'm looking at in Los Angeles. Would there be any major advantage to commercial leasing rather than building residential??? How would I go about calling Walmart or Macys and convincing them to build in Lancaster. Anyone in the LA or Lancaster area?
Go to your local Real Estate Investors Group. You will find people their who are developers, commercial building owners, etc. Pick their brains to see how they did what they are doing.
You can find a mentor. Find someone who is doing what you want to do or someone who has done it.
The website http://creonline.com has lots of information that would help.
You can find a mentor. Find someone who is doing what you want to do or someone who has done it.
The website http://creonline.com has lots of information that would help.
Sorry Bruh, I have been out of the loop and dealing with some personal shit. First, do the LLC! They are perfect for holding Real Estate or Companies. Second, check with the City planning department of Lancaster. Go from there Dawg. Ya got a good thing going. I may be getting 15 acres in Little Rock not too far from your spot!clarence said:
Good luck… “LICK”
Thanks for all the advice...I got the property profile and went to visit today....I'm rather disappointed because that shit is in the BOONDOCKS....its on the border of the San Bernadino/LA county line.......theres electricity, and maybe gas, but no water line (septic tanks only)...the only road to access the property is a dirt road and I damn near blew a tire off roading in my Impala....there are some houses in the area, local dirt bikers etc.....the locals we got directions from were friendly, but a couple looked like smokers/tweekers....there has to be a meth lab or 2 in the neighborhood...the only thing that I think that the land might be good for is developing a "secret garden" if you know what i mean....but with the property being secluded the garden may be pilaged or the desolate hillbillies might ambush us while we're prunning.....there are numerous realestate developments within 10-15 min away of Hwy 395 with water, electricity, and gas...i got some phone numbers so i can call and inquire about lots on MONDAY...are there any suggestions for what I can use the property for??????????? REMEMBER IM OPEN MINDED....Appoximately 7 acres, with a big ass hill (I think its called Nash Hill)....
The thing is that you have to take about 10 min of dirt road to get to the property....rich white people were racing trucks and riding atv'z and dirt bike out there....there was even a fuckin landing strip in the middle of no where...its not an easy access property...would there be a means of coaxing the city to pave the road???? They would benifit is there were homes built there (via tax $$$, and the city growing). There are other developments not to far away, but they have paved streets near by......any suggestions...I dont wanna start a garden, but i dont wanna be broke either...........My boy that was rolling with me said we shouls blow up the hill and sell PEBBLES....WHAT YA"LL THINK?
Why not just sell it to the developers who are already building near there? You aren't a builder so don't waste time/effort/money with that. Sell the land and use the money you make to do what it is you do already.
Don't sell right away to the 1st developer you talk to. Talk to many and try to entice more than 1 with the money they can make building there (if they pay you 1st). Start a bidding ar as if you are selling a single house to many interested buyers.
Don't sell right away to the 1st developer you talk to. Talk to many and try to entice more than 1 with the money they can make building there (if they pay you 1st). Start a bidding ar as if you are selling a single house to many interested buyers.
ODUB said:
Yea definetly wait it out don't sell your shit low if the potential value of the area is increasing. Also if it is a rural recreational type area consider activities like camping, atv courses, hiking. You got land start talking to companies that run summer camps, companies that do bungee jumping (they got this thing called reverse bungee jumping white people are going crazy for) outdoor activities are big in california. You may have to pay to get an acess road but if you are doing these type of activities it doesn't need to be too elaborate.
Now if the brother wants to sell it hit me up on the PM and let's talk some business. What this brother said is true. If you have never done this, there are a number of things that pop up in the process of building, dealing with codes Etc. Whatever you do I wish you the best Dawg! "LICK"deputy dawg said:
I dont want to sell to a developer because thats what I'm aiming for.....I want to develope that property for moderate profits (learning the process is more important than $$$ at this point).....I want to take the profits from this project to fund investments in LosAngeles (mostly development on vacant lots and on properties zones for more dwellings that presently exist)....Anyone have any more suggestions, warnings, etc??? I really appreciate everyones imput on my situation, you guys are so encouraging and welcoming. I have some insight on other investment opportunities, and hook ups if anyone is in LA. I will compile my resources and post...EACH ONE TEACH ONE
Last edited:
Cities don't generally pave unimproved roads dawg. You will have to put in the infrastructure at your development (sewer, stormwater drainage, and roads). Unless you're about to put in some awfully important development, it will be extremely unlikely that a city would pave 10 minutes of dirt road to get to your development -- the cost-benefit doesn't weigh in the city's favor.clarence said:
Suggestion: get you some professional help before you go too far. A little well spent cash can keep you from losing lots.
QueEx
Similar threads
