Four lots off existing frontage, or eleven behind a road that has to be built first

B is missing absorption and it is missing it badly. You have eleven lots priced at $105k in a market where your own comp set is 10 to 15 acre parcels. That means eleven units into a segment you have not shown a single closing in. Even if the price is right, what is the monthly take-down? If this county absorbs one lot a month across all sellers, and you are competing with everyone else's listings, you are not selling out in the 24 months your carry assumes. At one a month starting in month 14 you are carrying to month 25 on the last lot, and that is the good case. Run it again with absorption as the variable and price fixed. Nine lots sold at $105k and two sitting at month 30 with a price cut to $88k, plus 6 more months of interest. The likely result is that B goes to roughly break-even and A barely moves, because four lots at 10 acres is a shallower pool but also a much smaller pool to clear. The other line worth challenging is $255 a foot with 15% contingency on top. That is your number as a site guy, so it deserves more trust than an outside estimate, but county asphalt spec plus a basin plus whatever the inspector decides about compaction usually eats contingency by itself. What does the bond look like? If the county wants a completion bond or a letter of credit before final plat, that capital sits dead for the whole build and it never shows up in a spreadsheet like yours.

Get the lookback in writing before you do anything else, because it decides which deal you are even underwriting. The language varies a lot by county and by state, and the versions behave completely differently. Some ordinances count divisions from the parent tract as of a fixed date and cap you at a number forever. Others run a rolling window, so by year six you are clean again. A third group exempts divisions above a certain acreage entirely, which is why you see so many 10.1 acre lots in rural counties where the threshold is 10. If yours is the rolling five year version, A plus a later phase is real and B is probably the wrong deal. If it is the fixed cap version, you burn the parent tract on four lots and the back acreage is done. Ask the planning office for the ordinance section number and read it yourself, then have a land use attorney in that state read the parent tract definition, because that one defined term is where these fights happen. An hour of their time against a $380k contract. One more thing on A. Four lots at 150 feet of frontage each uses 600 of your 620 feet. Check the ordinance for corner clearance or driveway spacing off a paved county road, and check whether the state DOT or the county controls the driveway permits on that road. Four lot plats have come back as three because two proposed drives were 90 feet apart and the standard was 125.

A question worth settling early. In option A, when lot one sells, what is the legal shape of what you still own? Is it three separate platted lots being held, or a remainder tract that only becomes lots when someone buys? It matters because the tax bill and the loan payoff both depend on it. If the lender wants the whole $285k paid off at the first closing, that is really one sale followed by a free and clear hold rather than four sales. And if the county reassesses four platted residential lots the year the plat records, the carry number changes even though nothing physical happened.

Following anchor, does the four lot layout leave anything behind it landlocked? The lots run from the frontage back, so probably not. Still, a rear remainder with no frontage is a parcel only the adjoining owners can use, and they know it. @nicole_adeyemi, if the fixed cap version is the one in force, is there any normal way to reset it, or is the parent tract simply spent?

I've been tracking rural lot listings in three counties for about a year and the pattern that shows up is that 3 to 5 acre lots go under contract faster than 10 to 15 acre lots, and then a chunk of them fall through. The financing is the reason. A buyer for a $105k bare lot is usually getting a land loan with a bigger down payment and a shorter term than a house loan, and the terms move around, so confirm what's actually available from a couple of local lenders in writing rather than assuming.

So sextant's absorption point cuts both ways. B has faster interest and worse conversion. A has slower interest and buyers who tend to be paying cash or bringing a big down payment.

@tashaford30, on your landlock question, I've seen sellers handle it with a recorded easement across one of the front lots, but that easement then shows up in the title work for the lot you're trying to sell at retail and buyers ask about it.

What's the actual difference between preliminary plat and final plat, and which one costs the money?

My understanding from reading this thread is that preliminary is the county saying yes to the layout, and final is recorded after the improvements exist or are bonded, so in option B cobalt spends $488k somewhere in between. If that's right then the whole $123k in the B column is sitting behind a spend he makes before he has a single sellable lot, and the A column's $16k is spent before a much smaller yes. Which makes A look better than a 50% profit difference suggests.

Do A and keep the back.

You said the drainage cuts the back third. That's the part of this parcel nobody is going to pay retail for in the next two years anyway, and it's also the part where basin and road costs concentrate. Take four frontage lots, clear the loan, and sit on whatever is behind them with a tax bill in the hundreds. The bulk-to-retail spread on frontage acreage is the reliable part of this. The spread you create with $488k of asphalt is a construction bet wearing a land bet's clothes.

The lookback is the whole thing though. If a four lot plat spends the parent tract permanently, my answer changes, because then holding the back means holding something you can never divide.

If you go the orchard route and hold the back 30, can you hay it or lease it to a neighbor for grazing in the meantime? The income is small, though it covers the tax bill and keeps the ground from growing up in brush, which matters for how it shows when you eventually sell. Worth checking whether an ag lease affects the assessment classification in that state, one way or the other.

So a stormwater basin is a pond the county makes you dig so that the water running off the new road and driveways doesn't flood downhill, is that it? And it only kicks in above eight lots because that's where the county decided the added hard surface matters?

What I don't follow is why the basin is $65k when cobalt owns a dirt crew. Is the cost in the engineering and the inspection rather than the digging?

Take the other side of the $105k for a moment. In thin rural markets, the retail ceiling on a 4 acre bare lot is set less by comps than by what a buyer who wants to put a manufactured or modular home on it can qualify for once the home is added. Lot plus home has to land somewhere the payment works. Once the lot price goes much past about $70k in a market like that, that buyer disappears and you are waiting on a stick-build buyer who wanted 10 acres in the first place. So the thing to check is closed sales on 3 to 5 acre lots inside 20 minutes of this parcel, and listings do not count. If there are three of them in the last 18 months at $105k, fine. If there are two at $78k and one at $112k with a view, the B column is fiction. And note that price data availability depends on your state, since a handful do not make sale prices public at all, in which case you are calling agents and the title company rather than pulling a report. Eleven lots into a market that thin also means competing with yourself. Buyer number three sees you have eight more and asks for $12k off.

@laurenkim53's last line is worth sitting with. Take an eight unit where five units go on the market the same month after turns, on the theory that speed wins. The fifth one rents 150 under the first because prospects can see there is inventory. Absorption is not just a timeline, it is a pricing input. @angela_burke, on the crew question, price your crew's time at what they earn you outside, not at cost. If pulling them saves 70k of hard cost and gives up 70k of margin on paying jobs, nothing was saved, and the risk that your own job runs long grows because nobody is pushing on it.

Do the soil evaluations happen before or after the plat gets submitted? Windlass said spend the $8,800 inside due diligence, but if the county wants the lot lines drawn first, can you even test where the fields would go?