Community Development

The power of premium.

velopment, rising property values, and great returns to investors. But what if your investing currently operates on a slightly smaller scale? Is there room in the com- munity-development strategy for you? Absolutely, yes. Whether you are involved in the multi-million-dollar types of deals that bring Amazon to new municipal areas, you like to handle your flips one at a time, or you are just focused on snagging that third long-term rental property by the end of 2019, community devel- opment should play a role in your investment strategy. Some community development projects pan out better than others, and you can use your ability to spot a well- planned project to optimize your chances of investing in an area perfectly positioned to benefit from pending community development. While you can (and should) look into transacting in areas that have been targeted for community devel- opment — the most ubiquitous example at present is probably investing in or near a qualified opportunity zone — there is more you can do to check the quality of a community development project. While many of these projects enjoy massive capital influx up front, when it comes to long-term benefits, not all succeed or are sustainable when the public well runs dry. There are three characteristics of a community development master plan that indicate the community itself will be well-positioned to grow long after the initial phases of the project are complete: FLEXIBILITY IN URBAN DESIGN AND ZONING Community development projects incorporate mul- tiple vested interests, which often means zoning and urban design are subject to intense regulation. A sound community development plan will provide protection for the important interests that make the development possible but retain flexibility so that the community can continue to grow. For example, if there are public-tran- sit requirements for the area it is important to allow for the technological evolution of that transit over time and, also, changing rider preferences. Otherwise, you may find your community shackled to outdated transit that makes it an unattractive residential area in 20 or 30 years. NO. 1

run exclusively in a circular pattern that delineates the edge of the community all the way around, effectively enclosing it and creating a physical and mental barrier. Instead, at least some streets should extend outward into the surrounding areas so that there is room for future development and the new community can be integrated into the existing ecosystem of the city. Note: This does not necessarily apply on a mi- cro-scale to multifamily residential developments, which benefit from some degree of enclosure in order to create a neighborhood or community feel. This char- acteristic is more important when viewing an entire community development project that includes housing, retail, green space, office space, etc. BIKEABILITY OPTIONS The terms “walkability” and “bikeability” are no lon- ger exclusively reserved for investors interested in at- tracting a young, “hip,” single and professional crowd. Today, more and more residents and homeowners say the benefits associated with living in a walkable area, such as lower crime rates and better resident health, are important to them and worth paying higher prices for. Even better, there are a number of public grants and environmental tax incentives available to investors and developers whose deals contribute to the overall walkability and bikeability of an area. Many investors make the mistake of completely ignoring community development in their local areas because they believe they are not a “big fish” in their real estate market. Your real estate portfolio can bene- fit from effective community development just as much as that of a hedge fund or national developer and, furthermore, your projects may qualify for communi- ty-development incentives more often than you think. Never count yourself out without doing the research first. Your portfolio will thank you. • NO. 3 SOUND WALKABILITY AND

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Carole VanSickle Ellis is the news editor for Self-Directed Investor Society, an educational resource for self-directed investors interested in using their IRAs and 401(k)s to invest in alternative assets like real property, private notes, and even precious metals or cryptocurrency. Learn more at or email Carole at

SURROUNDING AREAS A well-planned community will have “open” areas that permit it to permeate and become part of other, adjacent communities. For example, streets should not

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