Cohousing-L Mailing List: RE: Negotiating land deals

[Rob Sandelin (floriferous]

I find messages like this really scary! It is enormously foolish to purchase
real estate for development without a clear understanding of contracts,
legal liabilities, development feasibility, etc. If you do not have such
expertise in your group (AKA a professional realtor/developer) then buying
land should be done with at a minimum with the consultation of a lawyer and
a development consultant. There is lots of land, some of which you could
never develop. If you don't know the difference between developable land and
undevelopable land in your area, you need to get that advice. Here are just
a few questions of many you need to understand:

What are the zoning characteristics in your area and how many rezones are
happening, and what are the characteristics of a successful rezone? How long
does a rezone take? How long can you tie land on a contract? What are good
contract terms? What are bad contract terms? What are your funding options?
What is the infrastructure required? What does it cost to develope just the
infrastructure? What is the market like in your area if you have to sell the
project? What is a good land value? What are the checklist requirements
(permits) and how much would it cost to meet them? Can you meet them and
accomplish your goals?

If developing real estate was cheap and easy, everyone would do it. It's
not. You should find a local successful developer and have pick her/his
brains. Sometimes you can do this for the price of a dinner and beers. I
have done this kind of talking with developers several times just to
understand the process. 2 out of 5 developers go broke in my area, mostly
due to bad projects that they can't resell or have to take a huge loss on.
Can you afford to take a huge loss? If not, get some professional advise
before committing to a property.

Chris Hanson has lots of experience doing this and he is worth hiring, just
for his advise. The Cohousing Company has lots of experience and is another
source. Go find a local multi-family building project under construction,
look up the developer, and tell her what you want to accomplish and ask how
much they would charge you for a 3 hour consultation.

Rob Sandelin
Northwest Intentional Communities Association