14 Steps to Take Before You buy Land For development
Due Diligence can make the contrast between failure and reaching success when it comes to any purchase, but especially when buying asset for development. I know you wouldn't do it, but I am often amazed that some citizen will purchase acreage with the intention of splitting and making some money without at least checking on whether the proposed split is feasible or even legal. Never rely on anyone's say so, even your real estate agent's, that you can positively split land and turn a profit. Even if the proposed split is legal, a developer must still determine whether a state communal record will be required prior to lot sales and what getting one issued will involve. Always exercise due diligence before you make your offer; Failing that, positively before you close your deal.
14 Steps to Take Before You buy Land For development
1. Start by request your agent if a state communal disclosure record is available on the asset in question. Among others, this is a good suspect to use a licensed real estate agent. All licensed real estate professionals are required to receive training on real estate laws and are required to keep up on that training. In addition, an agent can be considered to have acted in concert when selling asset if they knew or should have known that the sale they complete required a communal disclosure report, so an agent has a high motivation to exercise their own due diligence. If you are not using an agent, most states have branch of Real Estate (Dre) websites with subdivision disclosure data available. For added information, perceive your state Dre office.
2. Ask your agent for a asset profile. A good asset profile will comprise current ownership and their mailing address, site address, parcel number, census tract, housing tract, lot number, legal description, plat map, asset characteristics, along with acreage and latitude and longitude, the last replacement date with document recording number, estimation and tax information, transaction history, detailed sales comparables, colse to properties, demographics, communal schools, secret schools, plat map, flood zone and crime statistics. If you are not using an agent, there are many free services found on the World Wide Web such as Zillow where you can look up asset data yourself.
3. Ask your agent to give you a copy of the deed and any previously recorded Covenants, Conditions and Restrictions (Cc&Rs). You don't have to wait for the covenant to be written, the asset is in escrow and a title hunt is done to check out these documents. If you are only buying a measure of an existing subdivision, the existing Cc&Rs will be leading for you to check out prior to purchasing. If you are developing your own subdivision, you will probably be declaring and recording your own Cc&Rs.
4. After you have received your asset profile, go to the asset and walk the entire site to determine its suitability for what you want to accomplish. While it is no substitute for being there, many counties now have communal Gis mapping systems that will bring up the parcel in demand in high resolution orthophotography and give you road names, whether roads are county maintained, show railroads and give recorded dimensions.
5. Find Out about the infrastructure--What is in place, are they adjacent or how many feet are they to your farthest proposed lot, can the facilities be extended and what the costs would be to extend to your proposed project. Take measurements from the farthest lot in demand to each factory such as electric, telephone, cable, sewer and gas. Then perceive the utility companies and find out what the process and fees are to extend service that distance. If you do not know the local utility companies for that area, pull out the local telephone book or perceive the local room of manufactures for a list.
6. Next, call the local City or County Planning & Zoning (P&Z) branch and check on zoning or rezoning potential. P&Z will have a improvement Services branch as well, although it may be called someone else name. Ask to speak to the director about your proposal so they can tell you whether this fits in with the normal Plan.
7. Ask for a copy of the normal Plan and the Area Plan for your scheme locale. Besides a community history, a expert Plan tracks improvement trends and projects growth. It identifies county policies and priorities.
8. determine what is required by your local government entity for your land division. Many counties and cities have the regulations available on the internet. If they do not, call the P&Z that services the area in which you are concerned and ask for a copy.
9. Find more data on flood plains than is listed in your asset profile by pulling up a Fema map for your area at http://www.fema.gov. The Fema website will even tell you whether flood insurance is required by lenders for the stated flood plain.
10. Always determine whether you will need a state communal record or other disclosure reporting that may necessitate added work and fees beyond your land branch project. A normal rule is that if your split results in more than 5 lots, you will need a extra communal report, but there are other variables such as common promotional plans and what you may already own within that common promotional plan area; Always determine the rules on this requirement prior to your purchase by calling your state Dre improvement Department.
11. perceive an engineer to find out what the services may cost to achieve your proposed land usage, along with the costs of delivering the items required for your communal report, certifications from the branch of Environmental Quality, the branch of Water Resources and any local permitting.
12. Find Out what facilities you will be required to setup based on the acreage of your proposed split. Many counties, especially rural areas, have lot split requirements for 1-acre parcels or less necessitating some or all of the following:
a. secret maintained roadway passable by a 2-wheel drive vehicle.
b. communal maintained roadway (Primary or Tertiary maintenance passable by 2-wd vehicle).
c. Entrance to electric service or agreement w/ utility enterprise to extend service at your cost.
d. Within a fire district.
e. Direct Entrance to water service pipelines operated by a water company.
f. Adjacent to a paved through road (collector, arterial) serving the area.
g. Direct Entrance to paved road.
h. Direct Entrance to communal sewer.
13. Find Out ahead of time if your lender will offer partial publish provisions for your deed of trust when you begin financing for your improvements. Once you begin your sales out of your new subdivision you must ensure that each new purchaser will receive his lot free and clear of any blanket encumbrance.
14. Identify the current builders complicated in the surrounding areas and find out what the lots and dwellings are selling for and how fast they are moving. Check the re-sale value in the immediate area because this helps determine the sale prices of new construction in the neighborhood. After all, once you originate your asset you want to sell it at a profit
These 14 steps should be the minimum of your due diligence investigation and merely record the key issues that should be addressed prior to investing in improvement property. The critical suspect for due diligence prior to buying and developing land is to determine if the land improvement would be economically sensible. You can go beyond the above-listed steps and hunt records for pending divorce, bankruptcy or other life changing events that could sway the amount you want to bid or offer on the property. A pending divorce could mean the principals might be willing to accept less.
Public disclosure reports are meant to protect the public. Among numerous disclosures in a state communal record are facilities providers, inherent hazards and problems in the area, schools, transportation, hospitals and stores. asset profiles used to only be available through real estate agents and title companies but much of this data is now freely available on the internet. Google "property profile" and you will get numerous hits on where to find this free information. If you cannot find a county website where you can find communal recorded documents, call your county recorder and ask copies. Once you have gathered all of your data and made the educated decision to purchase your property, make sure you call P&Z to make an appointment for you and your engineer to characterize your plans for developing. Each area has its own subdivision and improvement regulations and most are available online.
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