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A friend of my wifes family owns 11 acres in southern CA.
About 2 years ago at the peak of the market, she was offered
1million/acre = 11 Million.What is it worth now – Less for sure.
What ideas do people have for making this a win win situation for her and myself.
One thought it to offer to partner with her and suggest to develop the land in to lots etc. When South Cal does come back in 3,4 or 5 year it should then be worth more than 11M perhaps?
Is this a crazy idea?
How long does this process typically take?
How much cash might this take?
How much does the land increase once split into lots etc?Since I know nothing about how to do this yet, I probably need to do the research on what it takes.
Books?Should a novice take this on?
Bear in mind the market is bad in South Cal so I have a lot of time to learn what to do.
Also the lady involved is in no rush.Any advise on what action to take is appreciated.
Happy Holidays.
Good Luck to everyone in 2008!
Hey Simon,
Sounds like a good opportunity but it’s over my head. I’ll get Jack Miller to give some input on this one.
If it is land zoned agriculture, I know you can greatly increase the value by simply getting it rezoned to a better use. But, would that be residential or would it be commercial? It just depends on what it is surrounded by.
There was a guy on the December cruise with a similar situation and Jack gave him some good advice.
Jackie
Development can be a REAL headache ! Ask me how I know…
We have about the same experience and we developed 6-homes so far. One was a Manufactured Home on a smaller lot. This “little” project has taken more time and money than we had ever thought possible.
I would do as little as is possible to have a quicker turn-around, like Jackie said. Changing from agriculture zoning to Single Family Homes or even Commercial land will greatly increase the value, with the least amount of headache.
If you want to make a little more money, you could spend more time and money getting a neighborhood plat set-up and approved by the City/County. That adds value as well, but it will cost you to have it engineered, but would save time for a developer who could step right in, buy the land and get building permits sooner; especially if the developer used “Stock Plans” already on file with the City/County. Less holding time for the developer means more money in his pocket (and yours)… but again, it’s more of a pain.
If this is what you did for a living, I’d say “go for it”… but if it’s not, do the minimum and turn it.
Taking on a “Builder / Partner” can easily lead to even bigger headaches, so I would avoid going that route.
Scott
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