What I’m thinking about: Development lessons. We purchased a 32-acre parcel in Lousiana in March, subdivided into three equal child parcels, and planned to deliver turnkey home sites with installed driveways by late May. Perfect timing for the market.
Parish approval was lightning fast (1 week vs. expected 4), so we thought we were ahead. Then reality kicked in.
Contractor quotes jumped significantly once they saw the actual survey, requiring additional bids and adjusted material selection for driveways.
Then came weather delays – multiple rain-outs despite crews working 7 days a week. Then terrain complications requiring project adjustments, and added cost.
What was quoted as a 2-week clearing job took 3.5 weeks (to put in perspective, we were initially expecting the entire project, inclusive of driveway installation to take 2 weeks total!)
And we still don’t have final timeline or costs for the gravel installation, though that should be ready today, in line with our original quote, and two of the child parcels are anticipated to be ready for market by our original late May goal.
Key lessons for future dev projects:
- Triple your timeline estimates. Whatever developers quote you, mentally multiply by 3x.
- Increase your budget buffer. We’re now budgeting a 25% buffer above the “high-end” estimate. If we don’t use it, we return capital to investors (as applicable). But better safe than scrambling for cash mid-project.
- Expect daily decision-making complexity. Even for “simple” projects like a 3 child parcel minor subdivide. Do we clear extra acreage to enhance visual appeal? Add an easement crossing one of the other child parcels to avoid $20K in extra dirt work? Every day brings new questions requiring immediate decisions.
- Boots on the ground are non-negotiable. We’re fortunate to have a local expert realtor essentially serving as project manager. Without him watching daily progress, we’d be lost or even more delayed — or worse, gouged on pricing.
Despite these challenges, I’m surprisingly optimistic about the anticipated outcome, even in this uncertain macro.
The realtor keeps raving about this being some of the best land in the parish, and how appealing the homesites are (view the private clearing that justified our budget increase).
And future development projects? We’ll be much better prepared.
I’m eager to shift our funding strategy to focus more on opportunities like this with these lessons applied.
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Need funding for your next land deal? Serious Land Capital is actively seeking development projects to fund. With fresh lessons from our Louisiana parcels, we can help you avoid the same costly surprises, with our growing expertise.
P.S. Dive deeper into our development project journey on Episode 132 of Get Serious. Raw tactics on managing contractors, weather delays, and decision-making when dirt starts moving. No fluff.
