Six months of nothing, then 22 acres inside a utility district, carry funded to 2033

You put debt on an asset with zero income and I want to be clear I think you did it about as safely as it can be done. Full amortization, no balloon, 35% down, two years of payments in a side account. That's the version that doesn't kill you.

The thing I hit at my scale is that $8,148 a year of committed outflow is a constraint on every other deal you look at for the next eight years. Not because you can't afford it, because a lender underwriting your next purchase will see the payment and the property that doesn't pay for it. Have you had that conversation with anyone yet? I got surprised by it on my third deal.

@flint fair, and if I could turn $24k four times reliably I'd be doing that. I've watched you post about the deals that went sideways too.

This is closer to what I've been looking for than anything else in this room. One decision, one page of arithmetic, then eleven years of not doing anything. The part I'd want to copy is the side account funded to two years of payments, because that's the difference between a long hold and a forced sale, and it's a number rather than a hope.

Dumb question, what does inside the utility district boundary actually get you if the line isn't at your frontage? Is being inside the boundary a legal entitlement to service eventually, or just an administrative line that makes it likelier?

@plumb depends entirely on the district. Some have a duty to serve within the boundary once you pay connection costs, some only have a duty when capacity exists, and extension of the main is often the developer's cost regardless. Get the district's service policy and extension policy in writing. It varies by state and by the district's own enabling documents.

The $19,400 side account is the thing I'm writing down. How did you pick two years of payments rather than one or four? I'm planning my first purchase and I keep making up reserve numbers with no reasoning behind them.

@quill two years is how long I think it would take me to sell 22 acres of raw ground at a price I'd accept rather than a price I'd take, in a bad market. That's the whole derivation. If I thought a sale took six months I'd hold less.

The 1.3 miles to the last recorded plat is the number I'd want to watch, and I'd re-pull it every year. Development doesn't advance smoothly, it jumps to wherever the sewer and the cheap dirt agree, and sometimes it jumps past you to the next quadrant and comes back later. Fifteen years of holding taught me that the direction is more reliable than the timing. Your direction looks reasonable. Your 2036 estimate is a guess and you should treat it like one, which it sounds like you do.

I'm at fourteen months and a folder of spreadsheets, so six months of research to one closing sounds pretty good to me. The carry page you described is a concrete thing I can go make this weekend instead of reading another market report, so thank you for that.

What happens to the tax bill when the district runs the line to your frontage? I'd assume the assessor notices that your land just became servicable and reassesses it upward, which is good for value and bad for the carry you've budgeted. Does your $19,400 account survive that?