Hey folks, wondering if anyone with experience buying just property could help me out.

here's the deal:

6.5 acres and owners are asking $650,000.

My friend and I are interested in purchasing this land. Other than making sure that all 6.5 acres are zoned for residential use, what else should I look out for / ask about?

Also, since this is going to be my first big purchase, what type of loan could I apply for and qualify for? Will I even get a loan for this purchase?

I would probably turn around and sell my share within 6mons - 1 year.

any help would be appreciated..

 

Make sure you can get the area serviced if you want to put houses up. Electric/gas/cable/phone/water/sewer/etc.

 

100 grand/acre, is this a good price? It will be very difficult to get land financing without a large downpayment. Are you planning to build on it? How long has this been on the market? Is it a desirable location?

 

as far a location, the land is located in Montgomery County, Maryland, so it's desirable. i will be going to the county planning/zoning office to ensure that public utilities can be used etc...

i don't plan on building on this land but sit on it for about 6 months and hopefully make a profit...might keep 1.5 acres for myself...

 

Find out why the current owner is not developing himself - may not want to, may have some real reasons.

Find out about public utility access and the process through which they can be obtained. See if there are any hookup moratoria that may influence your decision.

Find out what the review and approval process is for subdivision of the land. That, alone, might take your estimated six months and may require a civil engineer to plot the subdivision and establish the proposed property lines. The best CE to hire is the one that also does the reviews for the local zoning or planning review board; they will recuse themselves from subjective commentary in the formal hearing, but they will make sure your stuff is packaged appropriately.

Find out if the subdivision of the land will incur, by you, any improvements to the land prior to subdivision, such as a subsidiary road, curbcuts, sidewalks, etc.

Confirm presence or absence of any controlling easements. Your 6.5 acres may not all be useable.

Review the minimum subdivision lot size, and see how it "works" with the parcel you have. Depending upon the profile of the land, you may be sharply controlled as to the total number of true parcels you can squeeze out of this toothpaste tube. If the property is 6.5 acres, but has minimal street frontage, you may have to build a subsidiary road into the property to make the back lots accessible.


I'd hire a civil engineer to "vet" the property before you sign on the dotted line, just to give you a feel for what can/cannot be done. Best recourse is to hire either the largest or the most politically well-connected local civil in the area, buy a few hours of one of their mid-level land planners, and get him/her to review the site. THey can, for a few hours of consulting, provide you with a wealth of infomration that would take you days to gather, and they can also, if they are any good, give you a feel for the politics of subdivision approval in that community. In some communities, it is cut and dried, in others, it is a big hairy deal with public hearings, yadyadayada

 

Make sure that there is no enviromental issues with regards to the property such as toxins and chemicals in the ground from past use.

 

That would be a positive feedback for ric, . The major thing is: why are they selling and how come the owners did not develop themselves? How long has it been on the market?

 

This is the classic speculative land play. From the sound of it, you have no real estate expertise. Just a warning from someone who invests in RE for a living. If you think the land will magically increase in price in 6 months so you can become rich, you are in for a hurting. It might just do that and you might make money, but what if it doesn't appreciate in 6 mo or 12 mo. Can you support the loan? (Banks will typically lend up to 50-60% on land). What if it drops in value due to a real estate slowdown? I'm saying that you need to have a fully developed plan for what your investment goal is and how to deal with bad stuff happening.

 

And pay the property taxes on it too...