Many of our members are seasoned developers, but there may be some who are just starting out. Land Development 101 has proven to be a great resource for those interested in or just entering this industry.
Here’s a post on due diligence that everyone could use a refresher on. Now, during this time of COVID and slowing business, is a good time to brush up or relearn old tools of the trade, and this is a great site for doing that.
Planning and Due Diligence
If you REALLY want to learn land development from the very beginning, then DO NOT SKIP OVER THIS POST! Lately I have been getting inundated with questions like, “Ok, I have some land. Now what do I do?” or “I have a partner and we want to develop property. Where do we go? What’s the first step??” And I have to admit, the majority of what I have been talking about in my posts is mainly the land development CONSTRUCTION stage, which makes up only ONE piece of the whole process! (See flow chart below). But it does not cover the planning and due diligence.
So now we’re going to take a few step back to start from the very beginning. The “FEASIBILITY ANALYSIS” and the “ENTITLEMENTS” stage. This is where the bulk of your planning and due diligence happens.
1. FEASIBILITY ANALYSIS
During this stage, developers are running feasibility analyses. This is where you will determine if it makes sense to develop. Can you develop/build and turn a profit? That’s the golden question! This is the phase where you need to research the local area, the market, growth, zoning restrictions, the timing of the market, nearby amenities, good schools, demand for your particular housing product, etc. Read more…
