Bruce McNeilage surveys a plot of land.
STEP 3 REZONING AND ENGINEERING STUDY These next steps often happen simultaneously, but also provide one of the greatest risks in the entire process. No matter where you decide to build, at some point you will need to work with a local government body to get the needed permission to proceed. If zoning is not approved for residential building, you will need to go through the entitlement process. While this process could vary from one town to the next, there are several factors likely to be consistent everywhere. First, you will likely need to hire a civil engineer to do a survey, and possibly also hire a land-use attorney to get it through the city planning commission. Once the planning commission has given a thumbs up, the rezoning request goes to the city council. Approval usually takes two or three readings, then a round of pub- lic comment before it is put on the agenda for a final vote. This process can take anywhere from three to six months, depending on the municipality. This is often one of the most risky stages of the entire process. The civil engineering can run between $1,000 and $1,500 per house. If you are building a large subdivi- sion, this phase can cost between $100,000 to $200,000 – with no guarantee that the municipality will approve your zoning request. Also in this phase, it’s likely that the municipality will want to see that you are all in for the betterment of the community. They will likely want to make some improve- ments to the community that are challenging to fund, such as a new park, walking paths, or other amenities to make the neighborhood more attractive. Final approval
will often come with the caveat that you provide funding for these types of projects. In the end, it will make the neighborhood more attractive to potential renters, but could boost your pre-construction costs significantly. CLEARING AND GRADING Once the zoning challenges are behind you, it’s time to get down to the business of developing the subdivision. Clearing should launch as soon as the necessary permits have been obtained from the city. Any time wasted getting started on this step is time you won’t be collecting rent on the back end. STEP 4 STEP 5 INSTALLING UNDERGROUND UTILITIES The next step is to install utilities such as gas, electric, water, sewer and storm retention ponds. These utilities form the backbone of the entire project. Missteps at this stage can have dire consequences in the long run. Think about selling a house with a leaky basement or roof. It immediately knocks value out of the home. If the utility infrastructure is poor quality, it will impact the value of the entire neighborhood, whether renting individual homes or flipping the entire neighborhood to another investor. Caution at this stage will pay dividends down the road. FINAL GRADE, CURB AND PAVING Once you finish the utilities and bury the infrastruc - ture underground, the next step is the final grade. This is where you go from dirt to paved roads, with curbs and properly graded lots ready for construction. STEP 6
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