Creating a minor subdivision

[skyking1]

Our property is zoned R4-8 residential, and about 2.4 acres of it are in a separated area below the house site. I am pondering creating a subdivision and doing the bulk of the work myself. I can put in a hammerhead or if I have to, a traditional 90' round cul-de-sac at the end of the road.
I could make 8 lots down there.
It would mean committing a year to getting it all done, not in terms of full time work but that would be the timeline.
I'd have to ask the owner of the company if he would back my action with his bond etc and his equipment to keep my costs down. I'd have the dump truck and 120 for the work, and rent a dozer and roller for road and lot prep.
1) extend 8" sewer main ~310' down an existing road and set a manhole.
2) extend 8" sewer main ~360' into the property and set an end manhole. Roll side sewers off that main.
3) get 8" ductile iron water main tapped, and extend into the new road. Roll services and probably 1 hydrant off that new main.
4) dig co-trenches for the rest of the utilities and power.
5) prep the lots, grading and minor grubbing.
6) cut curb and gutter, sidewalk grade.
7) prep road subgrade.
8) pour curb and gutter.
9) do something with stormwater. This may be as simple as grading to a bioswale that would double a a common area.
10) Get paving done. That is the big nut, probably 90~100K there.

Out in front of all that is design and permitting, drafting an HOA filing.
I can make fewer and larger lots, limited to an average of 10,000 sf per lot.

back of napkin estimates is about 200K total in costs above the price of the property. I have not gotten a detailed market analysis on prices. My low guess is ~70-80K per lot.
Am I nuts to spend our first year in retirement both completing our new home and taking on all that above?

 

[crane operator]

8 lots on 2.4 acres is closer than I would want to live to anyone else. Or probably more like - closer than anyone wants to live to me. I wouldn't want that many neighbors on my place.

I wouldn't do the "subdivision", while trying to build your house. Either one will keep you pretty busy if you're doing it all yourself.

Why not do one at a time? Put the house off until the lumber prices come down, or put the lots off until you have your house all finished. You have a time frame that you have to be into your "new" house because you have your current house sold?

 

[CM1995]

Now this is something I have knowledge of, felt kinda useless with all the new members coming on board with mechanical questions and only be able to welcome them.

Couple of questions before my thoughts on budget:

Do you have a budget number for engineering? This can vary widely from one muni to another. First order of business IMO is to meet with a civil engineering firm that is well versed in subdivision design and approval for you local jurisdiction. A good firm can give you a feel about the project before you get too involved.

What is the permit/development fees? Here some muni's charge a lump sum and others a per lot development fee. One thing about developing property is every gov't agency that has jurisdiction will want a cut.

What type of sewer main - DIP, SDR, HDPE? What type of laterals and sizes?

Is there enough ROW on the county/city road to run the sewer extension or will you have to acquire easements from property owners?

What are the sewer and water impact fees? I don't see a line item for that cost.

What type and size water main for the domestic water? I would wager you will need at least one hydrant along the way and a blowoff at the end of the line. Will the lot taps be done at time of main extension or tapped individually when the meters are set?

What are the requirements for power, natural gas and comm service to each lot?

With 360 LF of road with curb and gutter you will need inlets and storm drains. Which leads to the next question on detention/retention requirements for the storm water. What are the local requirements?

How many CY of earth to move? Is there any rock?

Will you grade the lots "pad ready" or leave for the builder to perform?

Are there any green space/tree save requirements?

Is the $100K worth of paving in the overall $200K budget or in addition to the $200K?

What is the paving requirement? Usually for residential it's 6:2:1 here. 6" base, 2" binder, 1" wear course.

Will the street be dedicated to the city/county or will it remain private?

HOA - Hire a good lawyer that is well versed in HOA documentation and set up. Will you manage the HOA until the lots are sold or will you hire a management company?

Will there be a monument sign? If so at what cost?

Finally who is going to finance the project? If it's a bank then I would scrap the entire deal and just build your house and either enjoy or sell the 2.4 acres. If you have private equity then it's a different story. Just my $.02 - that's all I had left over after the last subdivision I developed with that was bank financed...

Sky you more than have the knowledge, skill and ability to perform the actual work however that's the easy part of developing. Planning, zoning, approvals, permitting, testing, HOA, contracts, bonding and hopefully making a profit after it's all complete is the hard part. On the flip side of that is there looks to be a couple $100K worth of profit in the deal. It's the old "risk-reward" conversation.

 

[hosspuller]

AND .. there's the definition of "Minor vs Major" subdivision... I'm on the local planning board. Around here, Minor subdivision is 4 or less including the original tract. There's much more $$ involved for a Major.... including traffic studies..

 

[Keith Merrell]

Yes a basic meets & bounds would be much easier I believe 3 divisions is called a minor land division. No need for the CC&R's, plus people would probably want additional land. Would it be possible to get a conditional use permit or variance to go multi family or light commercial? Then you would have a gold mine.

 

[skyking1]

Visiting with my sister now. I'll be back with answers to the question (s).

 

[skyking1]

"Yes a basic meets & bounds would be much easier I believe 3 divisions is called a minor land division."
Semantics. I can divide the property into 4 lots and that is called a short plat. Very simple.
My 8 lot is indeed categorized as a major subdivision.
Here are some examples of the fees.
Source Document
https://www.sequimwa.gov/DocumentCe...--Event-Permits-Land-Use-Permits-and-Licenses


Major subdivision - preliminary plat (Engineering fees also apply) 3,000 + 75/lot
Major subdivision - final plat (Engineering fees also apply) 1,000
Binding site plan review 975+ hourly after 15 hours
Final plat (PRD) review 975 + hourly after 15 hours
Plat alteration review 390 + hourly after 6 hours
Preliminary plat/planned residential development (PRD) review 3,380 + hourly after 52 hours
The engineering rate is $65 per hour.

 

[skyking1]

Now this is something I have knowledge of, felt kinda useless with all the new members coming on board with mechanical questions and only be able to welcome them.

Couple of questions before my thoughts on budget:

Do you have a budget number for engineering? This can vary widely from one muni to another. First order of business IMO is to meet with a civil engineering firm that is well versed in subdivision design and approval for you local jurisdiction. A good firm can give you a feel about the project before you get too involved.
10K

What is the permit/development fees? Here some muni's charge a lump sum and others a per lot development fee. One thing about developing property is every gov't agency that has jurisdiction will want a cut.
20K see the above link
What type of sewer main - DIP, SDR, HDPE? What type of laterals and sizes?
SDR 8" single trunk with 4" side sewers rolled off that line
Is there enough ROW on the county/city road to run the sewer extension or will you have to acquire easements from property owners?
yes extending from a manhole directly down the middle of the street and setting a manhole, then straight in to an end manhole. Depth from 6'~8'
What are the sewer and water impact fees? I don't see a line item for that cost.
~$20,500 including transportation and park impact fees per unit. These costs are borne by the lot purchaser directly. you don't pay the ~15,500 for the water and sewer until an actual meter is set or side sewer connected.
What type and size water main for the domestic water? I would wager you will need at least one hydrant along the way and a blowoff at the end of the line. Will the lot taps be done at time of main extension or tapped individually when the meters are set?
8" ductile in front of development. Get a contractor to tap the main for me. I'd bring in the main and set a hydrant. corps tapped and stops installed in boxes behind walks. Ready for meter install.
What are the requirements for power, natural gas and comm service to each lot?
It would be a typical development with water meter boxes, cotrenching with cable phone power behind sidewalks. No gas present.
There is an underground power main box at the corner of the property, that would have to come 150' to the entrance and then to the back, and two transformers set. That box would also need a disconnect vault, as it is a big main with no circuit protection for any transformer tap. I was going to have a ~$12000 bill to do that and set a single transformer at the house site. Now that gets pushed into development.
Now I get to piggyback my home off a transformer I set at the very back of the development, at the cost of the development. Same goes for my water meter and cable.
I was going to have to pay for ~500' of all of that.

With 360 LF of road with curb and gutter you will need inlets and storm drains. Which leads to the next question on detention/retention requirements for the storm water. What are the local requirements?
That will require engineering. I may be able to design bioswales as common areas. Rainfall here is ~16" per year and soils are good. No standing water on lot. see link below.
How many CY of earth to move? Is there any rock?
Minor grading on either side of the road to establish road and sidewalk grades. Minor cut/fill for road subgrade. It would be a 1 week small dozer rental. < 300CY
Geotechnical report for adjacent subdivision.:
https://www.sequimwa.gov/DocumentCe..._Geotechnical-Engineering-Report_RGI_8_5_2021
"Soil Conditions: The soils encountered during field exploration include medium dense gravel with varying amounts of sand and silt, and medium dense to dense silty sand with varying amounts of gravel and very stiff sandy silt with trace gravel."
I'll be able to burn any excess from the sewer main displacement, no other import/export needed beyond road/sidewalk sections gravels.

Will you grade the lots "pad ready" or leave for the builder to perform?
I'll do minor clearing and grubbing and cut/fill lots to match sidewalks and driveway cuts. building locations to be established by builders.
Are there any green space/tree save requirements?
yes. The property has a nice bluff that is treed with mature native species and would be protected and addressed by the HOA
I would need to put a section of that bluff on the plat for my utilities to come up the hill to our home site.
Is the $100K worth of paving in the overall $200K budget or in addition to the $200K?
yes, I can also see the bloat go to ~250K
What is the paving requirement? Usually for residential it's 6:2:1 here. 6" base, 2" binder, 1" wear course.
1.0' ballast, 0.65' Crushed Surfacing Base Course ( CSBC ), 0.25' pavement. The Ballast requirement will be likely waived due to a soil classification.
"GRAVEL BALLAST LAYER C MAY BE OMITTED FOR TYPE 6 CARLSBORG AND TYPE 63 SEQUIM SOILS AS CLASSIFIED BY NATURAL RESOURCE CONSERVATION SERVICE"
the line defining that soil type runs right along our bluff It literally exists only on the proposed subdivision portion of the lot.
Will the street be dedicated to the city/county or will it remain private?
City street requires a 60' ROW. Private is 45'. Probably stay private.
HOA - Hire a good lawyer that is well versed in HOA documentation and set up. Will you manage the HOA until the lots are sold or will you hire a management company?
good question

Will there be a monument sign? If so at what cost?
Just a street sign per codes.
Finally who is going to finance the project? If it's a bank then I would scrap the entire deal and just build your house and either enjoy or sell the 2.4 acres. If you have private equity then it's a different story. Just my $.02 - that's all I had left over after the last subdivision I developed with that was bank financed...
It would be my nickel.
Sky you more than have the knowledge, skill and ability to perform the actual work however that's the easy part of developing. Planning, zoning, approvals, permitting, testing, HOA, contracts, bonding and hopefully making a profit after it's all complete is the hard part. On the flip side of that is there looks to be a couple $100K worth of profit in the deal. It's the old "risk-reward" conversation.

I replied within your post in bold.
It is all a WAG until I get a detailed market analysis. If I put up a power gate and make it a gated community, the prices go on up. It has been a thought.

Here are a couple of pictures with descriptions. It was pasture for decades, and not a ton of work to do.

This one is looking e-ne diagonally . you can see the relatively smooth topography and the bluff of trees. That little cedar near the truck is the only large tree that needs to go. The rest I consider grubbing.


Existing street beyond my truck. Power vault on the prop corner behind my truck. Water main in the gravel shoulder on that street. Street dead ends behind the truck.



Looking east up the property border and adjacent road ROW, The power main was laid right along the property line and they made that nice little cut through the bluff to do so. That's my new driveway until they build that road through, then I will have a short one onto that road.




years before, somebody had the local surveyors toss a 16 lot example short plat on the topo, with no regard to the grades. It is comical to look at if you read these things. It is the PDF below. Essentially I would build lots 1~5 and 14,15,16 with the fire truck turnaround allowed for at the end.

 

[skyking1]

I've already had a revised thought on this!
Because they have a street ROW on the southern border of the lot, I'll eventually be able to access it off of that street. The new tentative plan is to do a short plat and just make three lots across the face of the current road. I'd extend the sewer main about 450 ft to a manhole and then just roll three side sewers into those lots I wouldn't have to build any road.
Later if I want to develop the rest of that lower area I can come in from that road bordering on the south with a short dead end road that is 200 ft or less in lengrh. If that's the case I don't believe I have to provide a fire truck turn around at all. That's saving a bunch of paving.

 

[CM1995]

Of course it's tough to give any advice on the market side of things which ultimately drives the development decisions however if you can subdivide 3 lots from an existing ROW and only install 450' of SS then that's the way I would go.

I think your budget is too low. Just don't see how you can do it all for $100K even doing all the machine and labor work yourself.

For S&G's I threw together a rough budget for the development. Even with a higher budget there is a nice profit to be had. This type of project is right up my alley.

 

[hosspuller]

I've already had a revised thought on this!
Because they have a street ROW on the southern border of the lot, I'll eventually be able to access it off of that street. The new tentative plan is to do a short plat and just make three lots across the face of the current road. ...snip .... That's saving a bunch of paving.

In NC the DOT has minimum spacing between driveways. Some developers have got around that by building shared driveways.

I wouldn't buy into that situation... unless I could pick the neighbor

 

[skyking1]

This isn't a DOT type situation it's a residential street. I'll find out week after next when I start inquiring about doing this.

 

[DGODGR]

I've been dealing with subdividing my property as of late. I think that you are on the right track. Please keep in mind that each municipality will have unique requirements and protocols and these will have the biggest impacts on how feasible a subdivision of this sort will be. My county planning dept. has been a moving target (and continues to be even though we are at the goal line). I would recommend that you keep an open mind as your ideas may change as you gain more knowledge about the process and requirements. You have already demonstrated this by adapting your plans to make the "highest and best use" while still remaining compliant with the requirements of the municipality (excellent!!). I still think that you have more homework to do before pulling the trigger but, again, you are asking the right questions.
I strongly suggest that you get some material quotes for the water and sewer components. You might be surprised at how much SDR costs these days (my costs are over 5 times what they were 1-1/2 years ago). Did you say ductile iron water main?! Fire hydrants in my area are costing almost $5k for just the hydrant and berry. You mentioned extending ~ 300' to get to you, and then another ~300' into your road. Most municipalities require a hydrant every 300'. That means at least (2) if I understood you. I like the idea of leaving the lots/pads rough and letting the end-user finish them off. (I was going to suggest this, but it looks like you have already come up with that on your own). That is the way I see most rural development happening but you may want to plat building envelopes, and set-backs, to keep folks from doing weird stuff and help maintain property values.

As I'm sure you already know, CM1995 has brought up some very valid points and, though I don't personally know him, I have always found value in the contributions and insight I have seen him offer within this forum. That being said, it sounds like he has already played with this and basically found that experience was the only thing that he gained from the one in which he "bank financed". From that, and from my own experience, I gather that building a subdivision is not always quite as easy as one might expect. It is risky. The work is the easier part of it (which always takes a lot longer than expected when one does it by ones self). CM1995 has also been kind enough to work out some numbers for you as well. Nice! Be sure to keep in mind that the associated costs vary greatly depending upon where you are. In particular, asphalt paving. Again, do all of your homework ahead of time. The devil is in the details!! One small thing (especially as it relates to the municipality that will regulate your process) can have significant financial impacts to your project.

As it relates to building your home at the same time, I think that you will be asking a lot of yourself if you try this. Even if you are fully retired and can dedicate all your time to this I think it too much if you plan to be self-performing all of the actual work. If it were me, I think it might be wisest to build the subdivision first (to take advantage of the current buying frenzy and inflationary pricing), and then build your place after. As crane operator mentioned, maybe the material pricing will have come down a bit and thus allow you to build with less capitol investment.

Regardless of which way you go it sounds exciting, and I wish you the best!!

 

[savman]

600k @ 75k per lot (assuming zero commission) and using CM's numbers it doesn't seem worth it. I'm assuming the land is worth 100-150k or so.

You are assuming a lot of market risk (especially given rising interest rates) and I would guess there will be endless hassles dealing with all the red tape.

And even if everything goes well my guess is you will be fully exposed on all your gains and have to fork a big chunk over to Uncle Sam.

edit: I could possibly be talked into it if I had the lots pre sold to a single user with a big (say 25%) non refundable deposit; or if I had done it four or five times before and there was less uncertainty with all the red tape.

even then I still don't like it. I would only do a project like this cash (maybe finance a portion of the land), and I need to get a better return for the amount of risk and cash. Much better return imo. fwiw I'm treating my opportunity cost as a cash equivalent. Meaning, even though I could do the work for less than market rate, I am forfeiting the chance to do market rate work. So while my physical cash outlay is less my investment isn't.

But that's just me. Other people have different circumstances. That's a big investment for me and I would either need it to be rock solid, or a chance for a big win to risk that much. Just my opinion.

 

[savman]

CM:

Is that an estimating software you use to generate that pdf or something else? That is a slick look.

 

[skyking1]

I just took a look at that and it is pretty slick! Thanks CM

 

[skyking1]

If I just build the house, my utility costs in addition to fees are
1) ~$2000 for a simplex liberty pump system and 100' of 2" pressure pipe and cutting into an existing 8" AC sewer main about 10' above my inverts. It is doable but I prefer to have a gravity sewer for the usual reasons.
2) ~$10000 for electrical services. I have been over it with the PUD and where I want the house is a long way, i need to put in a fuse vault to use the main I am near, and then run primary to my own transformer pedestal. We tallied it all up.
3) the water service costs are not going to change. The main runs along the far edge of the property.


If I short plat the 3 lots, I have to extend the 8" PVC main ~480' and set an 8' deep manhole. Roll the 4 side sewers off that main about 30' to get onto the property.
Those Side sewers pass under the ductile iron water main located in the gravel shoulder in the ROW.
Water services are easy peasy, 4 corps and a little dab of pipe to meter boxes.
That includes the side sewer for me. Then I have to run another 400' up the hill to the house. It will cost more but not having a pump? Priceless.

The electrical costs now become shared for my house and the short plat to some extent. That same fuse vault I was going to have to buy now also works for the 3 lots.
From that fuse vault I would run primary 150' to the middle of those 3 lots and set a transformer pad, and pipe the power to each property.
I can then sell the lots with water power sewer on the lot.
I may have to do 300' of standalone sidewalk. That remains to be discovered.

The prices on lots similar to these are ~100K

 

[skyking1]

I contacted the real estate agent who helped us with the purchase and he is going to do a market analysis as-is, and one with the utilities brought onto the lots.
That will tell me everything I need to know about the sewer main extension. If if does not pay it's own freight then I am done.

 

[CM1995]

CM:

Is that an estimating software you use to generate that pdf or something else? That is a slick look.

Thanks SV. It's just an excel spreadsheet I've built over the years. That's what our bids/proposals look like I just took our company info, logo and normal exclusion jargon off.

There are take off sheets where each scope of work is tabulated that feed into the proposal form. There is a page for erosion, demo, grading, storm, utilities and general conditions. We have Insight for take-off but bids are done the old school Excel way.

I just took a look at that and it is pretty slick! Thanks CM

Thanks SKY. I'm a nerd sometime and wanted to put that together, reminds me of my developing days.

 

[CM1995]

If I just build the house, my utility costs in addition to fees are
1) ~$2000 for a simplex liberty pump system and 100' of 2" pressure pipe and cutting into an existing 8" AC sewer main about 10' above my inverts. It is doable but I prefer to have a gravity sewer for the usual reasons.
2) ~$10000 for electrical services. I have been over it with the PUD and where I want the house is a long way, i need to put in a fuse vault to use the main I am near, and then run primary to my own transformer pedestal. We tallied it all up.
3) the water service costs are not going to change. The main runs along the far edge of the property.


If I short plat the 3 lots, I have to extend the 8" PVC main ~480' and set an 8' deep manhole. Roll the 4 side sewers off that main about 30' to get onto the property.
Those Side sewers pass under the ductile iron water main located in the gravel shoulder in the ROW.
Water services are easy peasy, 4 corps and a little dab of pipe to meter boxes.
That includes the side sewer for me. Then I have to run another 400' up the hill to the house. It will cost more but not having a pump? Priceless.

The electrical costs now become shared for my house and the short plat to some extent. That same fuse vault I was going to have to buy now also works for the 3 lots.
From that fuse vault I would run primary 150' to the middle of those 3 lots and set a transformer pad, and pipe the power to each property.
I can then sell the lots with water power sewer on the lot.
I may have to do 300' of standalone sidewalk. That remains to be discovered.

The prices on lots similar to these are ~100K

Interested to see how the numbers come in. I think you are on the right track with the 3 lots and spreading the cost of utilities for your house over the other lots. Save money on infrastructure and generate some income for your build.

I contacted the real estate agent who helped us with the purchase and he is going to do a market analysis as-is, and one with the utilities brought onto the lots.
That will tell me everything I need to know about the sewer main extension. If if does not pay it's own freight then I am done.

Good call.