Considering buying 5 - 7 acres located on a River about 40 miles from a city.
What are some major considerations I should take into account before entering into something like this. I don't plan on building on it in the next 5 years but would eventually want to develop it into either a single home or multiple homes while retaining ownership of everything (ie not develop it into a neighborhood or something).
I know some of you have done things like this and/or work in a space that could help you provide some light so I would be interested in anything you kids have to say.
-Do not buy it until you've seen the peak of flooding in the spring. If not, I can get you a great deal on an island in the Mississippi river.
-Watch out for erosion if you've got a hill with a steep slope heading away from the river. You really want to get a geologist out there.
-You sure you want to invest out in the countryside with gas at $4/gallon? Unless this is an amazing property or it's in North Dakota, the secular trend is against you.
All fair points, IP. My old man was an Environmental Engineer so I know a lot of his friends geologist friends would be willing to help.
Definitely hadn't thought about the flood plane issue so something else to consider.
Not sure how these apply to the lawless land across the pond, but:
Planning permissions: Any rejected requests? Who has the final say on it?
Likelihood of potential state construction/infrastructure. A railway line going past your house is not going to help prices.
Altitude vs surrounding areas. Water only ever goes one way (downhill).
Soil type vs. suitability for construction. Height of building is limited by the mass the ground can support.
Look up previous history of land purchases (available at town hall), see what new developments were bought, when they were bought and what those houses sold for (and when). Should give you a good idea about the timing required for these things.
T
No experience in this matter, but I have a few thoughts:
I live near a creek (hardly a river) in the Chicago area. With the snow we had last week and then rain last night, I was surprised how flooded it was this morning when I drove past. IP's comments on flooding are spot on.
What are the utilities like? Are you planning on getting your own well or is there water from a township? I have no idea how remote this area is, but definitely look into sewer, water, electricity, etc...
Can you rent the land out until you decide to develop it? If not, are you willing to pay all holding costs? Unless it is farmland that I'll be receiving rent for I don't think I'd buy land with the hope of developing at some time in the future, but that's just my personal opinion.
Happy,
Check out what the Army Corps of Engineers has to say about the parcel. A lot of people forget that they're often the ultimate arbiter of what can and can't get built near navigable waterways. They'll also have good dope on what you can expect flood-wise, and whether or not you can legally construct a berm or a levee. Also, the listing agent (assuming it's listed) will be able to tell you what flood zone it's in for insurance purposes.
EB,
Great stuff as usual. I definitely have some work to do before I can make any kind of decision.
What kind of topagraphical features does the acreage have? Is it heavily forested? Is it in a sandy area? As EB said the Core is where you need to check with when it comes to building restrictions.
I'm in the process of getting the topographical layout of the area as well as finding out what building restrictions from a legal perspective there might be. I also talked to a real estate lawyer and am going to have lunch with him later this week.
I'm looking for my own slice of paradise along the Bogue Chitto river, so I know it's a little more involved than your usual real estate transaction, but don't let anyone convince you that it's a huge deal. Land is land, after all. Once you mitigate the flood risk it's just like anywhere else.
And the jamoke who buys land on the highway isn't likely to see half-naked college girls go tubing by.
This might obvious to you already but If you're planning to develop it into more than one home you need to determine how it is currently zoned. Zoning restrictions in rural areas can often impede plans to develop more than one residence and if the assholes that work for the county don't want you to subdivide then it could be an issue.
Definitely worth the due diligence.
Don't know whether the the river is/was polluted, but if it is/was and the river flooded and there are chemicals/pollutants in the ground you have to remediate that shit. Get it tested by a reputable firm that has tested sites in the area. If you need to remediate, you may be able negotiate it in the purchase price. Better to find out before rather than after.
I'd do a lien search on the property. Also, check to see if you can get the seller financing at a cheap rate
FYI, you'll need about 35% down to obtain a land mortgage. Not a lot of banks like giving these loans so you'll have to find one--mostly community banks--that will do this. Of course, with enough equity and a low enough DTI most depository instituions will issue a land loan.
Entirely depends upon the purpose of the land.
^^^ True, but it's not like this is going to be a conforming loan.
Farmland is typically rather tough to get financing on.
Lately farmland is not even worth buying at the current price. I know he isn't going to be getting a conforming loan. I just know some people get the idea that all loans will be that way.
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