The six lot split that needed 640 feet of water main
Closed this out in January at a loss of about $101k over 16 months. Fast, thin, and I got the thin part wrong.
4.1 acres on a paved county road, $310k. Zoning allowed six lots by a minor plat, no rezone, no public hearing, which is exactly the kind of deal I look for. Comparable finished lots in that pocket were trading at $92k to $98k to small spec builders. Six times $95k is $570k. I gave myself 30 days of due diligence and used about nine of them.
What I missed. There were houses on both sides of my frontage on well and septic. I assumed public water because the road was paved and there was a hydrant a quarter mile down. The main actually terminated 640 feet short of my west property line and the utility would not allow new connections without extending it. $210 a foot for the extension, $134k, plus $28k to bore under a side road and set a hydrant at the terminus. The utility also wanted the extension dedicated to them, so no cost recovery from the two neighbors who tied in eight months later at no charge.
Second hit. My wetland delineation, which I ordered after the contingency expired because I thought it was a formality, flagged 0.4 acres of wet ground and a drainage feature in the middle of what was going to be lots 4 and 5. Reconfiguring cost one lot. Five lots, not six.
Final math. Land $310k, water $162k, remaining site work and septic evaluations $54k, soft costs $55k, carry at 12 percent on an average balance around $340k for 16 months, $54k. Total $635k. Sold five lots at an average of $92k, $460k, minus $26k commission. Net $434k against $635k, so I ate $201k of gross and about $101k after the pieces I'd already recovered on the first two closings. Either way, a loss.
What I'd do differently. Request a written water and sewer availability letter from the utility on day one, before I spend anything, and treat a paved road and a distant hydrant as evidence of nothing. Order the wetland delineation inside the contingency period, always, because on a 16 month timeline the $4,800 it costs is the cheapest option I will ever buy. And stop applying a residential flip due diligence clock to a land deal. Nine days was enough time to confirm zoning and nothing else.