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housing and spread of urbanized areas into undevel- oped, rural areas. This is known as suburban sprawl. It can be recognized by a few single-family homes and new road networks spreading into the undeveloped land and agricultural fields outside of cities. Land in these areas sell for pennies on the dollar prior to an urban plan or development. However, once projects receive approval, an immediate price increase occurs. This is a trigger to real estate professionals that devel- opment is about to occur. The key is to identify when sprawl is about to occur. This will be a hint to acquire land quickly and avoid price creep. Look for the beginning stages around met- ro areas and assess where development is happening. Some clues are the building of new fast food restau- rants or newly developed strip centers. History tells us that land value follows the size of the American dream. Single-family homes in the Unit- ed States are now on average twice the size of those inhabited in the 1950s. One or two-acre lots are now common, and many subdivisions now offer homes each built on 5 or 10 acres. It is not uncommon for areas in the western U.S. to even boast lots 25 acres in size. This trend leads to a hungry demand for land, acceler- ated road construction, and further spilling into fields, grasslands, forests, and other undeveloped lands.
UNDEVELOPED LOTS An undeveloped lot is land that has not been previ- ously developed for significant residential, commercial, or industrial uses. For our purpose, routinely it means no utilities or underground infrastructure exists. Land development is significant as the costs can range from $8,000 to $25,000 per lot depending on the type of construction and city requirements. That can easily make or break a project budget if not accounted for during the acquisition phase. Most of the land that is on the outskirts of mid-to-small cities sits without infrastructure, typically waiting for a large developer with deep pockets to fund a sizeable development. Usually this is the reason undeveloped land remains unused. The vital step is to ensure costs can be recov- ered and profits made if development occurs. If you are considering acquiring undeveloped land, here are some steps to follow: 1. Work with a pro who knows land in the area. 2. Don’t expect to get a loan. 3. Consider the value of homes in a neighborhood. 4. Make sure to get a survey and have an environ- mental test. 5. Consider utility infrastructure costs and road access. 6. Identify permits and zoning up front. Remember the adage “they aren’t making any more land”? It is true. Look for areas that may not seem attractive now but are near developing areas for great opportunities and value buys. If it’s near a downtown metro area, chances are, developers or companies will one day want to redevelop the area. Capitalize on it before someone beats you to the punch. • Joe Boston is Founder, President and leader of the Dallas Real Estate Investment Group, known as Dallas-REIG. He holds a Texas State Real Estate Broker License, MBA in Finance, MSHRM in Human Resources, a Six Sigma Black Belt, and a Professional Human Resources Designation (PHR). As a Decorated Air Force Officer Joe led and managed both military and civil service members for nine successful years. He went on to become a finance controller for several major corporations until he was introduced to corporate sales. In 2010, he decided it was time to transition all his efforts to his real professional passion… Real Estate! As a Realtor ® , Broker and investor, he has participated in over $40 million in traditional sales and a robust real estate investment portfolio of over 60 properties from the East Coast to the West, including notes, rental and owner-financed properties.
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