I got 300 acres about 20 minutes from College Station. It's been in the family and has no lien. I want to sell it. I can get more if I subdivide it. I don't want to do like King Oaks did and carve it up into 1 acre lots. I'd like to 10 acres, maybe 5 each.

I know I need to have it surveyed and platted. I know I need to have an environmental survey done. I understand the added costs of putting in underground electricity and water meters for each lot. I know roads are going to cost a bunch. Might have to do some re-fencing.

My question to you is, what have I forgot? I know there will be a lot more involved with this once I get into it, but would sure appreciate some insite and wisdom.

Also, how hard is it to get a loan against ranchland these days to do all this stuff? I think it's different from house loans. Would it have to be a development loan, or could it be a line of credit or something. Thanks.

Depending on how small you go with the lots, you'll have to submit a subdivision plate to the county to get approved. For most counties, the minimum lot size is 10 acres.

You might also consider deed restrictions or restrictive covenants on the subdivision to keep mobile homes and the like out.

Are there adequate utilities available nearby, or are you going to have to drill water wells and do on-site septic? Again, minimum lot size may come into play, because you need a minimum acreage to do on-site septic. It's usually 1 acre, but it varies depending on the county.

True, you can get more money if you subdivide it, but you've also got the added development costs, plus the sellout of the lots. Depending on the market, it could take a long time to recoup your expenses. Plus, that sellout is the hardest part to figure out, and is the biggest reason subdivisions fail.

Right now, banks are going to be very, very hesitant to make a loan on a proposed subdivision, unless it's just too good of a deal to pass up. Plus, since you aren't a developer per se, banks aren't going to be very willing to loan a pile of cash to someone that wants to subdivide his ranch. Plus, even when you aren't selling lots, you have to make that note payment.

I would strongly consider selling the land to a developer, and letting them deal with the subdivision development. When all is said and done, you're likely to come out ahead that way.

Step One: Get a copy of your county's subdivision ordinance.

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I would strongly consider selling the land to a developer, and letting them deal with the subdivision development. When all is said and done, you're likely to come out ahead that way.

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This was my first thought. Maybe you could take some equity partnership in the deal, bit it is going to very hard to get financing for something of this magnitude without a track record.

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Where abouts is it at? I might be interested in purchasing a lot. Depends on a ton of things of course but I'd like to know more.

Do you have alot of cash? If not perhaps you could look at selling off a certain portion of the ranch to finance the infrastructure on the remaining tract. Also, look at the county's standards for minimum lot size for both septic and well (I'm assuming no public water or wastewater in the area).
An engineer would be an integral part of developing your ranch. Most engineering firms will sink some time and effort into a project (at least a discussion and site visit) in hopes of winning the work. A local engineering firm (or City development/enginnering office) can tell you alot about what it would take to develop your place.
If you really think your tract has development potential, teaming up with a professional developer may be the best option if you are determined to develop it.
Good planning and engineering with cost management in mind would be critical in developing the acreage lots you are talking about.

Also, if you think the market is really there, entitling your ranch (approved preliminary plat, final plat, etc.) can go a long way in adding value when you go to sell it. The improvements are on paper but you aren't out the capital to construct the infrastructure.

Where exactly is the property? What is the road frontage? Overall shape?

I would be happy to talk with you about the options and what we think would be your best bet for either development or selling as a whole. I work at BCR and we have done several developments around BCS. Mostly within the city limits, but have done others outside the city limits. Ryand@bcrbcs.com

You may want to approach the neighbors on all three/four sides.

That being said, I own acreage 20 minutes from College Station. Where are you located (on the ever so slight chance that we are near each other)?

I have friends in King Oaks and it takes 20 minutes during morning traffic to drive, at 65-70 mph, from their subdivision entry to the intersection of Harvey/FM158/ElmoWeedon.

toocool:
I think they are exaggerating the time involved. I do it every day from Carlos and it doesn't take me that long.

I thank everybody whose responded. I think Im not too comfortable sharing where exactly the place is since I dont know any of you. I do appreciate the comments and if I can get this thing divided and on the market I will come back on and let everybody know where they can come see it.

I agree I do not have the money to make it really nice, like King Oaks. I like the idea mentioned about selling a bit then using that money to develop more. That sounds like a plan.

Coop water, and power is nearby. Homebuilders would have to put in septic. Thanks for the comments abotu checking with the county regarding minimum size for septics.

I like the idea of an engineering firm. Might ahve to look into that. The surveying is going to cost me quite a bit, from the people I've talked to. That and some roads to start out wtih will definitly cost some money alogn with buried power lines and water meters. In order to get there, I think I need a loan against the place, maybe 100,000 or so to start. It is worth at the present moment at least 3000/acre, I think but have not had it appraised or anythign, and that would put value at 900,000. It seems to me I could get a reasonable loan with the entire place as equity. But thats another thing I have to look into.

I don't want to sell to a developer. I think a developer would pay me 900,000 then go on to get a whole lot off the land. King Oaks lots go for something like 40,000 an acre. I know this would not be the same, but any profit a developer would make would just burn me up every time I drive by. Sorry.

Thanks for comments. I asked for suggestions and wisdom and I am much obliged.

It very well could be valued at $900,000, but it could be more or less as well. Is there a house on the property? Own any mineral rights? If you do, are there any current leases on the property? Pump-jacks? Pipelines? Etc? The reason I ask is the ability to give a surface waiver to the potential buyers.

One thing to think about is that King Oaks has not been too successful. It has been around for a while and have quite a few lots still to sell. The people that I have talked to who live their like it, but the subdivision isn't for everyone. Who will be the clientele that you will be selling the lots to?

Here's the thing about land development. There's a ton of risk involved, because as any appraiser will tell you, when start doing a subdivision sellout analysis, there are a ton of variables that have to be accounted for, and minor swings in the numbers can cause the overall value to change greatly. Plus, it's really difficult to reasonably predict the sellout, even with the best data available, and it gets really difficult to do in a market similar to what we find ourselves in today. That's why discount rates for subdivisions now are in the 20-25% range. The developer may make a lot of money, or he may lose his shorts in the deal. How he comes out in the deal shouldn't matter to you. Deciding to do this deal on your own because you're jealous of a developer's profit is foolhardy in my opinion.

If you have <10ac the landowner will be force to have an aerobic($$$) septic system, >10ac and you can have traditional($$) system. Just something to thing about.

If the property is in/around Bedias, I would suggest looking at the market to see what is available as far as build-ready lots in the 7-12ac range. Just from what I've seen, there are a lot of listings out there, and not too many buyers. It is more difficult to get financing for raw land/to build than it is to buy a home on land, so keep that in mind considering the current economic status.

What school district is the property located? That will also factor in on the type of cliental you will need to target.

Thank you all kindly. I think I will try to sell some 10 acre lots and see what happens. Much obliged for the advice.

Best of luck to you, but I think you're going into this full of piss and vinegar, and the harsh realities of the current real estate market may bring you down to earth, and not in a good way.

Look at it this way: if you can't take the money you're going to spend in this, and light it on fire, and be happy about it, you shouldn't do this.

Can you at least tell us in what direction from College Station it is?

Not to be harsh, but I showed this thread to someone in the B/CS area that is familiar with ranchette development, and asked him what he thought. His response: "Incredibly stupid."

Take it for what it's worth, but you really, really need to think about this before you drop a penny into this project. Plus, if you actually sell a lot or two, and decide not go to through with the rest of it, you've now got two additional neighbors that you may or may not like.

As a Civil who does/did (till the crash) this kind of work (mostly in the Austin area), you can probably get a 5k feasibility study done for 1,500. It's worth the money. They won't tell you how much you will make but it will go a long way in telling you how much it will cost.

The water service may not be adequate in the area for expansion. I am doing a development in east of Austin that is is requiring 1.9 mil in water system improvements.

Look up Texas perfection ranch for details on how hard this idea is to sell.

I think y'all are being a little harsh. Sounds like somebody trying to maximize the value of their property. I know in Grimes County Kent Moore did something similar, breaking his ranch up into 10 and 15 acre properties.

I think I'd try to partner with an existing developer. Surely owning the land in full should be something that can be brought to the table.

I did planning and engineering on a number or rural developments while I was a consulting engineer. If you have frontage on a public road, it is possible to do a Preliminary Plat of the entire property, then develop the lots that have the least development costs. That will generate revenue and measure the market.

If you don't want fancy entrance treatments, fancy permimeter fencing or othe amenities, you might find people that just want a place to build and have a horse.

I would strongly suggest that you at least talk to an engineer before you do anything. Like someone said, they are likely to meet and discuss with you for free. I did several land plans on the promise I would get the engineering and get paid when the project was funded and wound up eating that expense. Some times the developer didn't even own the property. I will go to my grave being naive.

I personally would like the no entrance and for the most part no common use roads. I understand to gain access to the interior property there will need to be road(s) and without a formal entrance no real reason for a gate. But I think people sometimes want to do those things themselves, gate fences etc.

And Bo, if the property is in Bedias you might want to change your name.

If you are going to proceed with this, go find you a real estate professional that you would trust with your life and pay them well for consultation. It sounds on the surface like you aren't very familiar with the marketing, regulations, forecasting and risks involved with this thing. Perhaps you are and I just misunderstand your posts. Is $900,000 today worth the same thing as $900,000 paid in allotments over the course of 5 years? 10 Years? At what point would the total net need to be to make it comparable to receiving $900,000 today? That is where the risk comes in.

Developments rarely achieve the projected cash flows that are forecasted at the time they are planned. It just doesn't work that way. There are always significant setbacks and unforeseen costs associated with getting the whole development moved.

That being said, you can make money on developing your own land. Just make certain you have sought advice from a whole host of folks (brokers, engineers, appraisers, etc.) These items don't come free but they are an integral part of planning and decision making process as to whether or not you should move forward with development.

Give Craig Browne @ Ashford Square Realty (979-764-7653) a call. When it comes to rural developments, your not going to find to many that know more than him. I'm sure he'd give you his thoughts as well as guide you in the right direction at no charge.

Thanks kindly for all the comments, good and bad. Im much obliged. Gonna see how 2012 is for selling some land.

[This message has been edited by JR Ewing (edited 1/18/2012 9:22a).]

Bedias, do you have any development experience? Can you secure adequate financing, do you have personal capital if need be? Development is a whole other thing, and that's why there are developers. I worked for a comercial bank and our bread and butter were subdivions. I can tell you, if you have no experience in development, you should not venture into development.

You're probably better off selling the land to a developer and realize that he gets paid becuase he knows what he's doing. Depending on road frontage, maybe you could survey and sell in larger tracts if you have adequate frontage.

"I think y'all are being a little harsh. Sounds like somebody trying to maximize the value of their property. I know in Grimes County Kent Moore did something similar, breaking his ranch up into 10 and 15 acre properties.

I think I'd try to partner with an existing developer. Surely owning the land in full should be something that can be brought to the table."

I know Kent...he has $$ to do something like this and knowing him he had all his ducks in a row way before he started selling that property.

Why not consider trying to partner with a developer...start with 50/50 split and see where the negotiations go from there. I can guarantee you, partnering with someone who knows what they are doing is going to make you more money than if you do this on your own.

If want to achieve the best possible price you should consider an Auction. There are some Aggie Auctioneers / Real estate agents at United Country Coleman & Patterson there in College Station. Might be good to ask their advice, I have seen them do a couple of land auctions.

The auction idea is interesting. Could I use my own real estate guy or do I have to use the auction house one? What percentage do the auction house people take? Can I set a minimum and if it don't meet the minimum do I still have to pay a auction fee?

Bedias -

Auctions work the similar and in step with the overall marketing effort you already have working. Yes, you can discuss keeping your real estate agent involved and set reserves. I am also in the auction business and the United Country guys i know through the state association. Auctions, like traditional listings are negotiable on how they work.

Good Luck, i think it would be an interesting possibility for you.