Ryan Dean Hoggan is one of the most successful real estate and land development investors in the industry. He’s found his success all on his own and has spent the latter part of his career helping other investors.
Ryan Dean Hoggan is always looking for new ways to share his knowledge with those willing to take his advice and use it to the best of their abilities. Knowing this, I asked Ryan Dean Hoggan if he’d be willing to share some tips on how to get a start in Land Development so that I could share those tips with you. Thankfully, he agreed, and here’s what he had to say.
The first step that Ryan Dean Hoggan insists on doing is to take a look at the economic feasibility of your current real estate climate. Remember, real estate is always a local market, so you need to take a look at how much your land will cost, then think about what you want to do with that land and how much that will cost.
Finally, you need to determine how much money you’ll make off of your development and how long it would take for you to make your money back. This will all depend on the current real estate climate, which is why we talk about feasibility. Is it feasible to make money back off of this investment? If not, you need to rethink your game plan.
This is why Ryan Dean Hoggan said to crunch the numbers first. Doing so will give a very good idea of the absolute max you can spend on the land you want to develop.
So after you’ve crunched the numbers, you can start negotiating a buying price for the land. At this point, you should also start talking to contractors and having them submit bids for your project, so you can better determine your investment price.
Zoning is often a deal-breaker, and if you forget to consider them in your initial plans and number crunching, you will have a bad time with land development. Not every type of real estate project can go to every location.
Zoning laws are nothing to mess with. Zoning laws will mold your investment strategy. Even if you’re buying or developing raw land, knowing the zoning laws is important because it will open your eyes to what potential buyers are going to be looking for and willing to spend.
Many land development investors use loans and financing in order to start their projects. Investors will usually cover 80 – 85% of the project’s cost. The last 15% will either come out of pocket or through loans.
What you use will be up to you, but many investors end up using financing because it ends up being cheaper in the long run and provides a higher ROI for successful projects.
Finally, you should understand the construction and marketing involved in land development. You should understand what kind of construction will happen, how much it will cost, etc.
On top of this, you should have a plan for marketing your property once it is complete. Networking with local real estate agencies and the like is a great way to prepare yourself for the marketing aspect and gauge how much this might cost.