A single perc test decided whether 11 acres became three lots

The release clause is the part I'd want more detail on. $26k per lot on a $60k note means two releases only knock the balance down to about $8k, so the third closing is where you finally clear the bank and the rest of that check is yours. Did they set that number, or did you propose it? Every land lender I've talked to prices releases so the remaining collateral stays over-covered, and the number they pick decides whether your first sale gives you any cash or just pays them down. If you'd sold the back lot first at $44k you'd have handed over $26k and kept $18k. Order of sale matters a lot when you're financed.

The clay layer diagonally across the middle is exactly the shape of every scope creep story I've got, just in dirt instead of drywall. You found it for $600 a hole before you'd committed to a lot layout. The version where you find it after recording the plat is the expensive one, because then you're amending a recorded document instead of erasing a pencil line.

Run the version where the back lot doesn't sell. 5 acres, shared driveway easement, trees. That's the hardest one to move in most rural markets and you got a neighbor to take it. If it sat 18 months you're at $99k gross, carry keeps running, and the $28k is more like $12k. How long was that back lot actually on the market before the neighbor showed up? That number is the whole risk in the deal and you kind of skipped past it.

What was the price per acre on the whole 11 versus what you sold at? I make it about $8,000 an acre in and about $13,000 an acre out. That spread is the entire strategy and I'd like to know if it holds at lower price points, because everything in my range is 40 acres at $2,500 an acre and I don't know if the retail side scales down the same way.

What's a perc test, in plain terms? I gather it decides whether a septic system works but I don't understand what's actually being tested or who does it.

Reading this as somebody who wants income without a second job, this is a second job. Fourteen months of taxes, mowing, a gate, three closings, a survey you had to buy twice. $28k is real money and I'm not knocking it, I just want to be clear with myself that this isn't a mailbox check.

marlow is right about the work but the interesting thing to me is what happens on parcel four and five. plumb, did you learn anything that transfers, or does the next county reset you to zero? My small portfolio taught me that the second one is only easier if the rules are the same, and land rules change at the county line.

Comparing to my side, $28k is roughly two years of cash flow on a four unit for me, and you got it in fourteen months without tenants. You also got it once. That's the trade.

Say it takes three years instead of fourteen months because the back lot sits and the middle lot buyer's financing falls apart twice. Your carry line was about $7,900 for 14 months, so call it $20k for 36. That eats most of the profit. Did you underwrite a slow case before you offered $88k, or did you offer on the fast case and get lucky?

I'm more interested in the entry. Listed at $105k, sat 200 days, you got it at $88k. Was that just time on market, or did you know something about the frontage and the four lot rule that the other lookers didn't? I ask because I make slow decisions and the thing I'm always afraid of is that the discount I'm seeing is a discount for a reason I can't see yet.

The four lots off existing frontage thing is worth every beginner in here writing down, with the caveat that the number is four in plumb's county and could be two or five or nothing like that where you are. Subdivision thresholds are set by local ordinance and the state enabling statute behind it, so they vary a lot. The principle holds everywhere though. There's a line where you stop being a guy splitting a field and start being a developer building a road, and the cost curve on the far side of that line is steep.

Something about the plat still isn't clicking for me. Is the plat the drawing, or the legal act of dividing? plumb says the survey was $4,200 for survey and plat drafting, and then the county recorded it for part of the $900. So the drawing becomes the division when it's recorded?

Is this repeatable or was it a one off? I want the version of a strategy that works the fifth time, and I can't tell yet whether the perc problem was bad luck or the normal condition of every rural parcel.

juniper, roughly: the plat is the drawing that shows the new lot lines with the surveyed measurements on it, and in most places it becomes effective when it's approved by the local authority and recorded in the land records. Recording practice and who has to sign off differ by state, so check yours.

The distinction worth learning is minor versus major subdivision. A minor split is usually a small number of lots on an existing public road with no new infrastructure, handled administratively, sometimes in weeks. A major subdivision means a new road, drainage, review by a planning commission, public hearings, and engineering. plumb deliberately stayed on the minor side, which is why his line item list has a survey and an attorney on it and not an engineer. Those thresholds are local. Two counties an hour apart will draw them differently.

So how do I find out my own county's answer before I make an offer? plumb says he called the planning office, and I believe him, but I don't know what to ask or how to make sure the answer I get is the answer that holds when I actually apply.

Adding to lantern's list from my own note file: ask whether the county requires a road maintenance agreement for shared driveways, because plumb's back lot has one and in some places that document has to be recorded before the plat is approved. Also ask what the review timeline actually is, in weeks, and then double it.

The shared driveway easement on the back lot is the document I'd want to read. Who maintains it, who pays, how is cost split if the back lot ever gets split again, and is it appurtenant to the land or personal to the buyer. A sloppy easement is a title problem for the next sale, and the next sale is somebody else's problem until it's yours because your buyer's lender won't fund. plumb, did your attorney draft that or did the surveyor just draw a strip on the plat?

Nobody's mentioned driveway culverts. On a county gravel road you usually need a driveway permit and a pipe sized by the county, and in my area that's a few thousand a lot with the entrance apron. Did your buyers eat that or did you install entrances to make the lots show better? Bare lots with no visible entrance sell slower in my experience because people can't picture getting a truck onto them.

$28k on $88k over 14 months looks strong until you price the labor. plumb, how many hours do you think you put in? If it's 150 hours across the survey, the perc redraw, the county trips, and three closings, you've earned a decent hourly rate on top of the capital return. If it's 500 you've bought yourself a job at not much per hour. That distinction changes whether I'd want to fund somebody doing this or do it myself.

Let me recompute because I want to be sure I'm reading it. $88k purchase, $18,900 of costs, $7,300 selling costs, $143k gross. That's $28,800. Against it: $60k was borrowed, so your own cash in was $28k plus most of the costs as they came, call it peak cash out of pocket around $40k. So you roughly doubled the cash you had exposed in 14 months, before income tax, which on land held and sold like this can get treated in ways worth asking an accountant about before you do the next one. The interest is already in your carry number so I'm not double counting it. That's a good deal. It's also a deal where one failed perc on the front lot instead of the middle one could have cut it in half.

Did buyers ask you for anything beyond the perc result? On the septic side I've seen people want a full soil report with a designed system layout, not just a pass. Costs a bit more up front and takes an objection off the table at the sale.

tender flagged the release clause and I want the actual language. Partial release provisions vary wildly in how they're drafted. Some require the released parcel to be described by an already recorded plat, which means you can't release anything until the plat is on record, and that sequencing matters if your lender is nervous about the split. Some also require lender consent to the plat itself. plumb, did your bank have to sign the plat?

Would anyone fund a deal this size passively, or is $88k too small to be worth papering? I'm trying to learn how private money moves and this looks like the scale where it's all friends and a promissory note, if it's anything.

My perc story ended worse. 9 acres, two lots planned, both holes failed, and the county wouldn't approve any lot without a passing site or an approved alternative system. Alternative systems were quoted around $28k installed, which killed the price I could ask. I sold the whole thing to a guy with cattle for $4k more than I paid and called it tuition. plumb testing before survey is the right order and I did it backwards.

girder's culvert point is real. On a rehab I'd never sell a house with no driveway and expect full price, and a bare lot is the same problem in a purer form. An entrance and a mowed path to the build site costs a few thousand and it's the cheapest staging in real estate.

Writing the entry cost down since that's my whole project right now. Before you close: perc tests, ordinance reading, planner email. After you close and before you sell: survey, plat, application fee, attorney, maintenance, taxes, interest. plumb's number is around $19k on an $88k parcel, so call it 20% of purchase price in soft costs on a three lot minor split. That's the figure I've been missing in every spreadsheet I've built.

One thing that will bite people copying this: surveyors are booked. In our market the good ones are eight to twelve weeks out and the second survey plumb needed after the perc redraw would have added a full quarter to the timeline. Get on a surveyor's calendar before you need them, and ask what their turnaround actually is rather than what their voicemail says.

How did you market the two agented lots? Land buyers don't shop the same way house buyers do, and in my experience the listings that work show a drone shot with the lot lines drawn on it and the perc result in the remarks. If your agent listed a photo of a hayfield you're back to the same problem the seller had for 200 days.

This thread taught me more than most of what I've read, mostly because of the order plumb did things in. Test the dirt, then draw the lines, then buy the survey. My question is the one flint asked and I don't think it got answered fully: how long was the back lot actually listed before the neighbor bought it? If that was 30 days I'll treat this as repeatable and if it was 11 months I'll treat the whole model as a patience test with a survey bill attached.