American Land and Lot

04/05/2023

Financing A New Land Development

​​​​​When an investor purchases land to build on, the next step is land development and financing. “Land development” cannot be precisely defined; generally, it refers to the physical, legal, and engineering processes needed to convert raw land to land (or lots) on which buildings can be placed.

Land development can be classified into the following six stages:

-Annexation. Taking the necessary steps to have land included within the boundaries of a municipality so that it can be eligible for municipal services.
-Zoning. Taking the necessary steps to obtain a zoning classification that permits the proposed use of the land.
-Surveying. Preparing an accurate and detailed survey of the land, showing not only the boundaries but also grades, drainage, topography, and other features of the land.
-Land planning. Drawing up a plan for the use of the land that is consistent with its physical characteristics, applicable zoning and land use regulations, and projected demand for types of land use.
-Subdividing. Platting (mapping) the land into blocks and lots in compliance with local laws and subdivision control ordinances.
-Physical improvements. Changing or improving the land by grading; landscaping; installation of streets, sidewalks, and sewer, water, electric, and other utility lines, drainage and retention basins, and similar physical improvements.

Loans for land development are usually obtained from the same institutional sources that provide land acquisition loans. One important source of financing for land loans, the seller that takes back a purchase money mortgage or sells on an installment basis, is unavailable for development loans because these require the provision of actual cash rather than merely the extension of credit on the sale of the land. Thus, if institutional financing for land development is not available, the developer must seek other noninstitutional sources. One possible source is a syndicate of private investors that puts up capital either in the form of equity or a participating mortgage. Another source is a loan from a real estate investment trust or pension fund, which sees land development financing as a way of providing above-average returns from real estate investments.

03/07/2023

Acquiring Land For Development

Acquiring land for development is necessary no matter what kind of market we are in. Professional real estate assemblers are always looking at and acquiring under-utilized sites within cities or in suburbs. Here are some ideas on how those professionals do it…..

02/27/2023

Building on leased land results in a separate ownership of that building and the land. The two owners, one of the land, and one the improvement, come together in one investment parcel. In this situation, the landowner wants someone to develop the land, but still wants to continue in ownership. The developer prefers to lease rather than buy the property. One owner wants the security of owning the land with a good lease to the owner of the improvement. The owner of the building puts up less money since the ownership of land is not part of the expenses in the development.

Whether a rental market is weak or strong, lease negotiations can be difficult when the landlord wants concessions that are different from the norm. One situation that happens is when the owner of an office building or other commercial property intends to sell when market conditions improve, whether...

11/08/2022

http://www.charlottencproperty.com/commercial/archives/1420/

​The acquisition and improvement of land is a large-scale operation and requires large amounts of capital. This has created methods of land acquisition that gives the developer access to and control over a large enough tract to make development economical without requiring an initial outlay of all...

10/10/2022

great information

Residual land analysis is an ideal way to calculate land value based on building area, cost estimates, and development risk.

07/25/2022

4 Lot Package For Sale in Union County with Seller Financing

4 Platted Lots In Monroe with R10 zoning. These lots have access to water and sewer- just pay the tap fees! This property is an amazing 4 lots in a well-established community. The street is a dead end which will provide great privacy. This is a per...

06/30/2022

https://listings.realbird.com/F4A4E4C4/603986.aspx

This 1.19-acre property is located in Conover BC, approximately 50 miles northwest of Charlotte; 60 miles west of Winston-Salem; and 80 miles east of Asheville, and is the geographic center of Catawba County. R20 Zoning allows for Multifamily and cer...

06/07/2022

Land investing is still relevant...

In investment properties, when cash expenses are more than cash receipts, there is negative cash flow. Most investors avoid properties where this is the situation, unless there are strong underlying economic factors that indicate the cash flow can become positive….(more)

04/22/2022

Hickory Lot For Sale just down from the school.

This lot is 1.07 acres and zoned R-2. The lot is located a block down from Southwest Primary School. Easy access to I-40 at Old Shelby Rd and super close to Henry Fork River Park. Plenty of shopping and dining close by. This property has access to ...

07/31/2021

The ​Land Assemblage Option

​The option is an extremely versatile investment tool that comes in a variety of forms and can be used for a variety of purposes. The best part of an option is that it gives the optionee (the party holding the option) control over property (in the sense of the right to acquire it) for a very small cash outlay. In effect, it achieves a very high degree of leverage and conserves cash, two goals sought by both real estate investors and real estate speculators.

An option gives to its holder the privilege to buy a specific parcel of real estate, at a specified price, on specified terms within a fixed period. An option to buy also is known as a “call.” (An option to sell, known as a “put,” also may be used in real estate, although it is more common in securities transactions.) The person who grants the option (the optionor) agrees to refrain from selling the property to any other party during the option period in exchange for consideration, which the optionor will keep whether or not the option is exercised by the optionee.

Combine An Assemblage
An assemblage is when someone, usually a developer, combines an assemblage of separate parcels of land into a single parcel. The developer putting together the assemblage normally is interested in acquiring all or none of the parcels. Consequently, in order to avoid committing large amounts of capital to a project that may not succeed, the developer will proceed with options rather than purchase contracts. Of course, each contract could be conditioned upon acquisition of the remaining parcels, but this would reveal the assemblage plan and cause an immediate rise in prices of the parcels not yet acquired.

Most Favored Purchaser Clause
A landowner that suspects that an assemblage is in process may insist on a most favored purchaser clause before giving the option. This requires a developer to increase the exercise price of the option so that it is equal (on some comparable basis) to the highest price paid for any other parcel. Because the developer may be confronted by one or more holdouts and be forced to sharply increase the exercise price for them, this type of clause can substantially increase the gain to earlier optionors.

Find out more here...

This month’s newsletter has just been released! Check out the latest tips for tenants and users of commercial real estate space.

03/02/2021

Property 549 Stratfordshire Drive, Matthews, 28105 has bedrooms, bathrooms with square feet.

02/11/2021

https://listings.realbird.com/F4A4E4C4/582681.aspx

1109 Stanfield Rd. Greensboro NC 27410 is located in Guilford County. The lot is located just of McConnell Rd. off I-40 with nearly 120 feet of road frontage. This is the perfect opportunity to build your dream home on a quiet street. Seller Financi...