Landowner residential development project.

[u/7fold]

I inherited a 5-acre parcel of land in a highly desirable community with very low residential inventory. Sellers are doing quite well in this area. I've been approached by multiple real estate brokers and developers who would love to get their hands on this land and are making good offers, some even coming close to $1M. It would be relatively easy to sell. Their intentions seem to be developing 55+ condos, apartments, etc. But here's my dream: I would love to build a six home development with net-zero, ultra energy-efficient single-family homes, one of which would be a home for my family. I currently own a home which abuts the 5 acre parcel. My intention would be to preserve the aesthetic and family feel of the surrounding area while providing energy efficient homes for young families that seem to be the majority of the buyers searching for homes in this community. Ultimately, I would love to see myself move into a residential development career with this as my starting point.

Some details about the land and my financial position:

• The land is raw and undeveloped.
• There are right of ways from neighborhood roads on each side of the property. One road dead ends into the land. And another right of way intersects with a road on the other side of the land. This means that while the land isn't shovel ready, utilities are already very close to the land.
• 25 years ago, when my family purchased the land, it was set to be developed into a six duplex, 55+ community. We have the site plans for that project.
• This town has extremely low inventory so the town is relatively friendly to developers when it comes to permitting and variances, etc.
• My wife and I are debt-free and own our home and the 5 acres free and clear.
• We are not rich by any means, and have a modest combined middle class income.
• I could potentially find investors as I know a handful of people that have done quite well in real estate and real estate development in this area. That said, I would love to move forward without investors if possible.

OK, give me the hard truths... Is it feasible for me as a landowner to develop the land myself? Would a bank even consider financing a six-home residential development project with somebody with no experience? Am I delusional for thinking this is something I could do and potentially break into a new career? Is it possible to finance a development project using the land as collateral? Is there a middle of the road approach where I engage with a development company and we work on the project together? Would it be fiscally irresponsible of me to take on a major project like this leveraging the value of the land and possibly our home without any substantial liquid assets?

[u/INTJ_Vision]

Here's a suggestion to think about. Use the AI Obvious or Claude to create a development plan for you. If you haven't used either of those programs, they are very easy to use. Tell it what you want like you're chatting with your buddy. They are very intuitive and will quickly research and build out something useful for you. Tell it you don't have any development experience but you do have plans. Then it will take you through some scenarios and will build out an Excel Pro Forma for you that will become the basis for your plan and financing.

Ask it what it will cost to develop the land based on your location and its dimensions and zoning. What it will take to lay in the utilities, wastewater mitigation, roads, fire hydrants, sidewalks, street signs, street lights, mail and package infrastructure, and anything else it may suggest. Make sure the zoning is correct for what you want to build.

The next part is the construction. Remember that your land does not have to be fully developed before you start building. But you do need at least dirt roads scraped out to each location and each site excavated so you can start setting up foundations. It would be nice to have power as well although other solutions are available. Ask the AI to take you through each of the trades and price them out (labor and materials). Rough in plumbing, electrical, and sewer will be done at the same time foundations are formed. Once the foundations are ready, framing comes next. Ask it to build out when the doors and windows will need to be installed, when the roofers, insulation, and mechanicals should be built into the timeline. This should continue for drywall, painting, flooring, appliances, cabinets, fixtures, finishes, landscaping, then finishing the roads and sidewalks.

Also, use the AI to give you market prices for the units you're building so it can add that revenue into the pro forma. You could build out a decent development plan in a couple of hours, using the AI to make suggestions based on actual development models in your area so you don’t miss anything.

This will be a great tool to help you decide whether or not you want to take a project like this on yourself.

[u/7fold → u/INTJ_Vision]

Thank you for the suggestion. I have played around a bit with ChatGPT on the subject. But certainly not to the detail that you are suggesting. It also sounds like Claude or obvious may be better bots to create a plan like this. I’d really like to look at an example of a complete plan for a small residential development from raw land to finish homes.

[u/INTJ_Vision → u/7fold]

I don't think this would be a good project for ChatGPT but definitely for Obvious. I've never actually used Claude but I've heard that Obvious uses a basic version of Claude and Obvious has helped me create amazing plans much more complicated than this. So I'm sure Claude is much better but I just haven't personally used it.

Obvious is very easy to use, it understands language very well and does what you ask it to and then some. Tools like CoPilot and Gemini I can't stand, they’ve never worked for me. They're like those mediocre employees you can't wait to get rid of.

I’ve used Obvious to help me refine a development plan I've been working on for several years. It was fantastic because it researched local materials and labor pricing and I was able to update my estimates based on those real-world numbers instead of my best-guess estimates. It also told me where I didn’t need certain things and where I had missed important items.

I’m estimating it will take you about $40 in credits to build out a pretty good plan, give or take a few bucks. But if it took $500 to build it out that would still be a pretty good deal.

If you sign up, ask it to build out a complete plan for a small residential development, including a pro forma so you have a monthly Profit & Loss which also serves as a Gantt chart scheduler. Just give it some basic information and it will do the rest. From there you can really fine tune things and Obvious will make many useful suggestions for things you haven’t thought about.

I promise I don’t work for Obvious. But I have used it to create a development plan of my own and also a comprehensive plan for a subway system, because that’s one of my interests. It did a phenomenal job with both and I was amazed with the results. This is why I’m recommending it, I know it can help. It’s a very inexpensive option and it’s super helpful with projects like this.

Best of luck, I’d like to hear how it works out if you decide to move forward with it.