Is 40 acres Enough for a Golf Course?

Golfgar4 · Jul 29, 2003

Hi Mark!

( The requirements we had to meet do not vary regionally, they very from county to county and town to town around here. )

The same is true here. For example, the township just north of the one where the property is does not allow dividing larger parcels into any parcels smaller than 35 acres, while the township to the east will let you go down to 20 acres. The township that we'd be involved in is one of the few left that will let you apply for as small as 1 acre. But as mentioned earlier, that probably wouldn't be approved, so we'd stick to minimum of 3 acre parcels.

( In our case, dropping below 5 acres mandated paved roads to specific standards, fire protection, county water (because of availability) and many other things. Above 5 acres gravel roads and wells would have been fine in our zoning. )

It is also similar here. As far as I know, anything under 3 acres would have had stiffer restrictions than the Ag2 zoning. I've been waiting to hear back from the Township Supervisor to confirm this, and to get other information, but he hasn't returned my call yet.

( Here we can not expect the lots to sell overnight so it must be viewed as a longer-term investment. )

Obviously I wouldn't know what the time frames would be for your area, but this is something that we've looked into. In our area, this kind of property sells, on average, within 21 days of being placed on the market. I would consider that a very short time, and a very good thing!

( Personally, it looks to me like you are on to something and I would put forth the effort to investigate it as much as I could. )

Thanks for the encouragement! Interestingly, the wife and I had a 3 hour drive one way this past weekend, so we ended up discussing nothing but this project for 6 hours! /forums/images/graemlins/ooo.gif

We literally went from the idea of sub dividing this 40 acre parcel into smaller parcels and then building our new place on one of the parcels, to dividing it into larger parcels and selling them off. We would still move into the existing structure and live there until our new place was built. But instead of building on one of those parcels, we would wait until we had a sold a few of the parcels and then use the money from the sale to purchase the kind of wooded acreage that we really want. Then we would build our new place and when it was finished, sell off the rest of the parcels and the farm.

Like you said, you put down your money and hope for this best! We still have a ways to go, but we're headed in the right direction, we're getting good advice from our realtor and the TBN brain trust, and we truly believe that we can make this work for us!

And somewhere in all of this, I'm going to get my tractor!! /forums/images/graemlins/grin.gif

rancar · Jul 30, 2003

Good morning Garry...

I was just wondering about something here.

How is the demand for real estate in this area you're looking at? Do you have the time to mull this over and plan out all the potential options you can go? Are there others looking at this property? Do you have concerns someone else just might jump in here, offer the asking price, and then you may find out after the fact that you'll have to start your search for a retirement home all over again?

I'm asking these questions because around my way, a property like this is very desireable and it probably would be bought up within days or weeks. If I was looking for property like this and came across this parcel I'd feel compelled out of necessity to act quick to strike a deal with the seller.

...Bob

MarkV · Jul 30, 2003

Bob, same thing around here. 40 acres with well kept house and outbuildings in an area that could be divided would not last to long. Price varies so much by region it is hard to relate to but here I would consider the asking price pretty good also.

MarkV

Golfgar4 · Jul 30, 2003

( If I was looking for property like this and came across this parcel I'd feel compelled out of necessity to act quick to strike a deal with the seller.
)

Hi Bob!

As I mentioned in an earlier reply, 3 - 5 acre rural parcels in our neck of the woods are only on the market an average of 21 days, so they can go pretty quickly. Larger parcels, such as the entire 40 acre parcel we're looking at, seem to take a little longer to sell as a whole.

I agree with you that there is a certain "urgency" in making a decision. The property we're looking at was just made available the week before we found out about it, and it has not been advertised by sign or in the paper - yet. It is listed with another realtor, and our realtor is keeping a close eye on whether anyone is looking at it.

Even though we feel some urgency, we know we still need to be methodical if we want to protect ourselves also. As I mentioned in my last reply to MarkV, we have now decided that we will consider the potential purchase more as an investment rather than the area where we want to build our new home. By selling off a number of the 3 - 5 acre parcels that will be created, we will have the money to purchase our other property for the house. What we're doing now is compiling as much information as we can about the sales history of land in that area, determining the various upfront costs that will be incurred in the process of purchasing and getting the land re-zoned, and identifying other requirements that the Township and/or County might impose.

I'm still waiting to hear back from a survey company on an estimate for surveying the property, but someone I was speaking with the other day suggested I might be better off, both financially and effieciency wise, to consider hiring a geotechnical engineering firm to do this work. He was telling me that these kinds of firm can handle everything from the surveys to the perc testing, to determining where future roads would go, etc. Do you have any experience or knowledge about these kinds of firms? It seems to me like hiring an "engineering firm" would be a lot more expensive than doing things locally. I've located a number of firms in the state that do this kind of work, but I haven't contacted any of them yet.

I guess we've decided that we can make this happen, but if for some reason it doesn't, then it wasn't meant to be. As much as we'd like this to work out, we won't jeopordize our financial security by rushing into things without knowing all the risks.

rancar · Jul 30, 2003

"...consider hiring a geotechnical engineering firm to do this work. He was telling me that these kinds of firm can handle everything from the surveys to the perc testing, to determining where future roads would go, etc. Do you have any experience or knowledge about these kinds of firms? It seems to me like hiring an "engineering firm" would be a lot more expensive than doing things locally..." 

Hiring a small engineering firm to do this kind of work may be something to consider. In this case, the sum of the parts may be considerably more than the whole if thinking about a single entity addressing everything at one time. These engineering firms have all staff on board or they are already under contract with smaller independents (ie, surveyers, perc engineers, etc) at pre-determined rates that may be somewhat lower than what you personally can negotiate prices for.

Here's another thing you may want to think about. Procure the services of a land use attorney who has done this before. These guys are specialists and know everything that has to be addressed. Not far from me, there was a 60-70 acre property that a home owner was trying to sell for a long time but couldn't. Finally, they brought in an attorney who was an expert in negotiating with town planning and zoning boards appropriate lot sizes. In my area there is no zoning. There is great flexibility in subdividing one's property. However, members of the planning and zoning boards are mostly farmers who don't necessarily want to see the rural area become suburbanized. This attorney knew these board members and was able to parcel this larger parcel into about 12-13 smaller parcels. This attorney was an expert and provided the property owner with a total sales price greater than what he would have received by selling the greater parcel as one intact parcel. But, you know this already. Point here these attorneys also have the contacts. They know surveyors, perc engineers, the local zoning board members, and others to make it happen. They may be able to advise you on all the intricacies and complex elements, if any, that need to be considered.

"...As much as we'd like this to work out, we won't jeopordize our financial security by rushing into things without knowing all the risks..." 

This is the best advice anyone can give to anyone, regardless of what they are purchasing. I've ignored it several times in the past and have gotten burned in the process. As the saying goes, "Haste makes waste." And, in my case, being hasty in making a financial decision has cost be dearly. You're wise to be careful here.....especially with something that may tie up your capital for a considerable length of time.

...Bob

Golfgar4 · Jul 30, 2003

We had talked about the need for a land use attorney, but at this point we hadn't decided if we'll go there. Don't get me wrong, we are consulting our regular attorney who knows what's going on. Although not specifically an "expert" in land uses, he certainly would have the contacts to tap into if needed. And I trust him enough that he would recommend bringing in someone else if he felt he was getting in over his head. I'm also planning on talking with him about this Geotechnical engineering firm business and see what he knows about it or could find out about it.

Thanks for the suggestion. I appreciate your input! /forums/images/graemlins/wink.gif

rancar · Jul 30, 2003

You know something Garry....I'm going to go against what I said in my previous reply. I just came back from lunch and I was thinking about your situation. This is my gut feeling and that's all it is. But, you have a real nice parcel that's for sale here and if I was in your place and had the capital to put down, I'd just go for it and figure out all these other things afterwards. The only unsure thing would be the selling price that's still to be negotiated.

If I bought this place, I'd have the time then and flexibility to consider all options rather than feeling pressured to think through all this now. There's a number of creative deals you can do with this parcel. There's a number of things you can do with the use and/or rental of the barn buildings, silos, and land. Farmers around me are always looking for good land to rent. Some also look for buildings to store their hay, straw, and machinery. I'd say the same is true in this case. The house....you can live there, rent it out, or sell it eventually as a stand alone residential parcel. If you bought now, you'll then have the time to figure out all the detailed economics of how to make this deal work for you and to determine if you want to live here yourself on one of the parcels or somewhere else.

Here again, it's just my gut telling me this. But, I think you've been through this a number of times as a risk manager. You have certain instincts that have been honed by your professional experiences and for you to be seriously considering this deal there's something inside you that says this could be a very good deal.

Here's where I go out on a forecasting limb. I say you'll eventually buy this place. You'll parcel it up in a way you think is best. You'll make out like a bandit in the re-sale of the smaller parcels, house, and barn buildings (think Penturbia....this trend I believe is only beginning), and you'll either build on one of the empty parcels or somewhere else. In the process you'll make more than you think is possible which you can put toward the purchase of a fully loaded tractor (or two) and a nice assortment of implements. /forums/images/graemlins/smile.gif

How's that for stepping out on a limb?? /forums/images/graemlins/ooo.gif

As you know, sometimes we can't eliminate all risk. You know this. But, we can do everything possible to minimize risk and you're doing this now as you and your wife think of all possible, creative things you can do with this property and all possible contingencies. These are your professional skills I think that are working for you. The remaining element in any decision to be made is that step of faith...when you don't know every detail in minutia but you know enough to prompt some decision to be made. This sounds like the stage you are currently at.

Well, my thoughts are with you as you, wife, and family think this one through. I am looking forward to seeing what you decide.

...Bob

Golfgar4 · Jul 30, 2003

( Here's where I go out on a forecasting limb. I say you'll eventually buy this place. You'll parcel it up in a way you think is best. You'll make out like a bandit in the re-sale of the smaller parcels, house, and barn buildings (think Penturbia....this trend I believe is only beginning), and you'll either build on one of the empty parcels or somewhere else. In the process you'll make more than you think is possible which you can put toward the purchase of a fully loaded tractor (or two) and a nice assortment of implements. )

As always Bob, you've hit the proverbial nail on the head! This is exactly what our thinking is at this time. The only thing holding us back is the possibility that the land wouldn't be re-zoned, which would blow a hole in everything. So if we purchased it before having a reasonable expectation (not 100% necessarily) that it would be re-zoned, and then it wasn't, we'd be up that crick without that paddle! That's why right now, the most important thing is for us to be able to talk with the Township Supervisor to get is take on how things might play out. I know he won't guarantee anything, but it seems that he's reasonably comfortable with the idea of going ahead with the sub dividing. I just need to confirm that with him.

Now of course you're right when you say that we can't eliminate all risk. I've certainly learned and lived by that belief for a long time. But, I've also learned that before you move ahead with any kind of project, you identify the risks and then do everything you can to eliminate, transfer, or minimize the risks - in that order! That's where we are at this time. Hopefully it won't take too long.

Like I said in the earlier reply. We're prepared to go through with this, because we see the same things that you mentioned. It is a tremendous opportunity. But if for some reason it doesn't work out, well then, I guess it wasn't meant to be and we'll move on. And when we do move on, we'll be better educated and prepared to make the next opportunity happen!

dummy · Jul 31, 2003

For what you want to do, stick with a local survey/engineering/land planning firm. They should be your best resource to solve this quickly and efficiently once you decide to start. They should be able to tap all the resources required to complete your entire project(s). Granted they will sub-out stuff like perc tests, but they will be the ones responsible for coordinating with the health depts. and then placing them on the plat along with the (preferred) house locations, roadways, soil conservation areas, etc.

Hopefully, this will all work out for you in the long run. Should be a wonderful opportunity.

cowboydoc · Jul 31, 2003

Just another thing for you to consider. 40 acres seems like alot until you get out there. Once you get that land sold you may wish you could buy it back. I sold a little corner off of one of my pieces of ground by the house. It's on the other side of the creek and hidden by trees so not a big deal. Now though the guy stores trash bins, old trucks, etc. there. I'd sure give him back what he paid for it and more not to have that eyesore there. Luckily we can't see it from where we live.