# Anyone have advice or tips for developing a new subdivision?



## [email protected] (Jan 6, 2011)

I just purchased 95 acres of land outside of Cold Lake, AB. We have the Area Structure Plan complete and approved by the local council. We now have to go through the application process for the subdivision itself which can take up to 6 months. I have been in contact with company reps from electricity, gas, telephone, and different construction companies for clearing trees, grading and road construction. I am in the market for a new lawyer and engineer because of excessively high bills. We own the land free and clear and after we are fully approved, I would like to take my business plan to the bank and ask for a loan(50% of the value of the land), to cover the costs. I have designed a website and plan to sell the lots on mls.ca myself. I have never done anything like this before so I could use any tips or advice from someone who has done it! I would love to hear some testimonials of how you developed your lots, some snags you ran in to, how you saved money or time, etc. Thanks in advance!


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## OhGreatGuru (May 24, 2009)

Ain't free enterprise wonderful? Anyone can become a developer. No qualifications required.


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## birdman (Feb 12, 2013)

Its not that simple and while I've been out of the business for quite a while I would think that you could have a tough road ahead of you if you are not an experienced developer with deep pockets. As a start, I would think that in this day and age they could well want pre sales and a firm price contract in place for development of the lots including any DCC's, etc. Also, how would the interest be paid during the development phase-presumably by borrowing. Don't expect it to be easy if its your first one.


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## Barwelle (Feb 23, 2011)

Can't offer any advice, no real experience with developing a subdivision but just some construction work, but frase is right. It's _always_ more complicated and more expensive than you expect. And will take longer, too. I used to laugh at the grumbly older guys who complained about the lack of practicality and time sensitivity in the planning and development departments of municipalities... but as time goes on, I run into situations that prove that the dislike for local government bureaucracy is not unfounded. Might be different (hopefully it is) in Cold Lake.


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## [email protected] (Jan 6, 2011)

This isn't rocket science folks. Although, I do seem to recall that Elon Musk taught himself rocket science so that might not be fair to say. Did I say somewhere that I thought this was going to be easy? I was just putting some feelers out to see if there was anyone with some words of wisdom or even words of encouragement. I know they're out there and I'm going to find them. I suppose I should have prefaced my post with "haters needn't reply".


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## Fain (Oct 11, 2009)

[email protected] said:


> This isn't rocket science folks. Although, I do seem to recall that Elon Musk taught himself rocket science so that might not be fair to say. Did I say somewhere that I thought this was going to be easy? I was just putting some feelers out to see if there was anyone with some words of wisdom or even words of encouragement. I know they're out there and I'm going to find them. I suppose I should have prefaced my post with "haters needn't reply".


I wish you luck and success!! alot of haters of this board. Don't let them get down. I got no experience in subdivisions but consider buying materials in bulk, China maybe. Ive had success buying flooring in bulk with Alibabba. How many houses are you building? 

Best of luck and hope you make a pile of money


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## [email protected] (Jan 6, 2011)

Thanks Fain and we are focusing on selling the serviced lots first. When we are debt free, we are going to consider building houses. I am kind of hoping to just sell the lots and not build though. Home building is a whole other monster! There are 20 lots so we may end up building between 5 and 10 if we do decide to go that route.


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## newuser (Sep 16, 2014)

Good luck, OP! When I was a buyer for a house to live in, I was advised to look at the history of the builder and avoided ones with sketchy pasts. If you were the builder, I would have avoided your subdivision simply because you had no history. It makes sense for you to find someone better known to build the houses.


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## donald (Apr 18, 2011)

I am/was(long story)trying to sub divide 1 acre....I am only building one house on the property anyways.....
Obviously you must have considerable liquid cash because obviously you wouldn't be doing what you are doing
I was quoted $200.00 for 1'(foot)of supply and install on the main sewer line(sewer line that connects under main road(not branch off)
I am not sure how long the main will run but as you can see this is one example where one needs deep pockets
I am not even going to speculate what the concrete and curbing will/would cost(concrete is ridiculously expensive)
Pretty sure your on the hock to erect all hydro line(again $$$)
Also you got to pay a engineering firm to draw up the sub division($$$)
Your looking at multi millions here when you add everything up
You can't be serious are you?
There is no way you are winging a 95 acre sub division
Individuals don't take on these types of projects,large developer companies do.
You must be joking!


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## donald (Apr 18, 2011)

If this is indeed true and you are serious,why not sell to a actual developer?
If your plot is truly desirable and you bought for a good price you should make a fair % over what you bought it for and it might make sense to keep holding to gain more profit(if you are in a prime area that is under development)

Usually it goes-raw land-developer-builders-public buyers in that sequence.

Investing in raw land is high risk and it is highly complicated(way outside the novice investors scope imo)a few mistakes and it is very easy to go broke(you need to be well versed imo)

Just curious if you have developed anything before?doesn't sound like it
Usually one would work there way up to that type of specialized investing and not ask a personal finance board over the internet.lol,i just find this funny because it is so crazy


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## crazyjackcsa (Aug 8, 2010)

It can be done, but I'm with donald. I'm a councillor in my municipality. 95 acres is not a small project. The underground infrastructure is going to be considerable, as you're already discovering.

This isn't a real estate development board, it's an investing/money forum. The easiest money is flipping this to a developer, but then again, if it was a great development project, a developer probably would have moved on it.

My advice is hammer in a sign saying "Proposed subdivision." Start taking down payments on lots and then run off with the money when you hit a snag, which you invariably will.


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## donald (Apr 18, 2011)

The other thing is there are only so many players in certain area's and cities and provinces 
You have to use certified contractors that your area provides(huge boys club)
Your a new fish,at a huge disadvantage and a easy market for price gauging
Developing large parcels are about political connections also
I am not sure your financial institution will be quick to loan you a few million(your very high risk)
But I might be wrong,things might be different in cold lake
Be interested how this plays out for you 
Be curious how much you purchased 95 acres for?that approved for this


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## humble_pie (Jun 7, 2009)

a relative of mine has been trying to develop a mountainside.

the property is breathtaking. Pristine & fragrant pine forests dipping down to a picturebook blue lake that stretches from canada into vermont.

it took mah cuz most of a lifetime to assemble the parcels of land but eventually he wound up with half the mountain. A giant real estate company has been banking the other half for decades. Their side isn't being developed.

on the relative's side, various plans have been drawn up calling for roads & houses. Sometimes 45 houses, sometimes up to 110 houses.

it's been one setback after another, mostly with different layers of government. The coup de grâce came when the provincial government condemned the private dirt roads he'd built that wound up the mountainside.

"They don't like the camber on my roads," shouted my relative (he's the type who shouts a lot) (a bit like the people in cmf forum who keep posting in *bold face type*)

"cahliss, my roads are better than the effin damn public highways."

shortly after this speech, my friend & i drove up the mountain. Beyond terrifying. Not even a dirt road, just driving up at 55 degrees on a thin winding track, overgrown with brush & faintly indicated by small boulders. We came to where the "road" dropped off a cliff. There we were, front wheels near hanging in space, magnificent view of the distant Mississquoi river valley far below us.

i'm scared that putting it in reverse is going to knock us over the edge, i said, trying not to act like Thelma.

i think i'll get out now, said Louise.

don't you dare open that door, said Thelma.

slowly, the car backed up 14 centimetres.

i'm walking back down from here, said Louise.

nah, you gotta help me figure out how to turn this @%!!$ around in the trees, said Thelma.

somehow we got down off the mountain alive & went to see mah cuz. You're right, your camber is perfect & your gorgeous road is a breeze all the way to the summit of the mountain, we told him.

you want to buy the place, roared the cuz, i been trying to sell it for 6 years.


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## humble_pie (Jun 7, 2009)

hmmmn cold lake, alberta

isn't that the busiest fighter aircraft base in canada?

isn't that where many of the CF-18s fighter jets are based? including the ones that were recently sent to kuwait so they can bomb ISIL into oblivion?

isn't cold lake also likely responsible for the satellite base at inuvik NWT, set up near the beaufort sea in order to keep a closer eye on increased russian intrusions into canadian arctic air space in recent years?

air defence of the true north strong & free is a growing industry right now. Growing industries need housing.

in addition, i'm wondering whether this might not be a first nations initiative. Or a first nations partnership. They often have strong backing. Sometimes from the dedicated aboriginal divisions of the chartered banks.

let's sit back & wait patiently. This might turn out to be a fascinating story.

http://www.rcaf-arc.forces.gc.ca/en/4-wing/index.page


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## Fain (Oct 11, 2009)

humble_pie said:


> hmmmn cold lake, alberta
> 
> isn't that the busiest fighter aircraft base in canada?
> 
> ...


Wrong Thread


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## m3s (Apr 3, 2010)

Real estate in Cold Lake is pretty hot. Lots of money to be made and lost there. Besides military, there are a lot of oil field workers there. It's hard to develop anything because you have to compete with the oil fields for skilled labour. Now might be a brief opportunity to develop something with the price of oil down. They actually "frack" for oil there by forcing high pressure steam into the ground. Completely "unexplained" bitumen and water has been oozing out of the ground in random places for a few years now. The media has mentioned this random phenomenon as the "never ending" oil spills. They aren't really oil spills though, we just haven't coined a catch phrase for oil oozing out of the ground indefinitely in random places yet. Of course the Natives and Greenpeace are furious and most Canadians have never heard of the place.


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## Berubeland (Sep 6, 2009)

I don't know much about property development, except what I've picked up from those who have done it before. Frankly there's no way to learn this except by doing. 

Best of luck to you. Money is the lubricant.


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## humble_pie (Jun 7, 2009)

so real estate in cold lake is hot now? who knew

wondering, though, if ottawa did actually quietly buy those 4 controversial F-35 supersonic fighter jets without parliamentary discussion or even disclosure last fall, as this Ottawa Citizen story based on leaks from US mlitary documents suggests

http://ottawacitizen.com/news/polit...ase-4-f-35s-in-2017-according-to-u-s-military

i suppose those planes - if purchased - will be delivered to CFB cold lake? in 2017? then they would be followed by 61 more, as proposed for the mega-billion $$ fleet?

what with Imperial Oil fracking in the neighbourhood it's not surprising that real estate in cold lake is booming. Gotta hope that belle des jardins' properties don't end up showing bitumen oozes.


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## nobleea (Oct 11, 2013)

m3s said:


> They actually "frack" for oil there by forcing high pressure steam into the ground. Completely "unexplained" bitumen and water has been oozing out of the ground in random places for a few years now. The media has mentioned this random phenomenon as the "never ending" oil spills. They aren't really oil spills though, we just haven't coined a catch phrase for oil oozing out of the ground indefinitely in random places yet. Of course the Natives and Greenpeace are furious and most Canadians have never heard of the place.


It's not fracking that they do with the steam around Cold Lake. It's called Cyclic Steam Stimulation or 'Huff and Puff'. You pump steam in to the reservoir, it heats up the heavy oil enough to flow and then you suck on it with a pump to get it out. Repeat the process many times. Imperial/Esso has been using it at cold lake for dozens of years.
http://en.wikipedia.org/wiki/Steam_injection_(oil_industry)#Cyclic_Steam_Stimulation_.28CSS.29


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## [email protected] (Jan 6, 2011)

Thanks for the replies everyone! 

M3S, you are right about competing for labour with the oil patch. Companies having been laying people off and local contractors haven't been getting as many contracts from the oil companies since the price of oil has come down. We are hoping to capitalize on that and I think it will give us some bargaining power when it comes to prices with our contractors. Also, we have some contacts from other towns in the area that aren't as busy and have a bigger pool of workers. Thanks for posting!

Berubeland - I think you are right about learning by doing and that is exactly what is happening. As each step arises, I am learning as much as I can! And luckily we do have a lot of money to start us off so that is definitely working to our advantage!

Barwelle - Before I started this project I told myself all of things you have said - that it will take longer, cost more money and be way harder than I can imagine. I accepted those facts so that I wont be disappointed or frustrated when I come into problems. I feel lucky that so far things have been smoother and easier than I could have possibly hoped for. The thing about developing is that you do not need to be a master in the technical aspects, you hire the professionals to take care of that. What I have had to master is organization, communication, research, planning and in the future hopefully negotiations and sales!

Thanks for all the angles and advice and also kind words!


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## Just a Guy (Mar 27, 2012)

One thing you may want to do first is a little research with other developers in the area as to what the county/city/whoever is in charge is like to work with.

I remember looking at a property once which was located on the border of three different counties. Similar properties were selling in the other two counties for 4 times the price, and it was a busy development area, so initially it looked like a steal...

Upon further investigation however, I discovered that the county it was in was very anti-development, and refused to issue any permits to redevelop the land in its jurisdiction. As in, you had a hard time getting a permit to even put up a garage. Basically, the best hope was to wait for at least 3 more years for the election and hope the council changed...which wasn't likely as they'd been in power for several terms.

So, while other properties literally less than a mile away were worth a fortune, this property, and the bordering ones were basically worthless and couldn't be sold.

Now, this may have been a good "buy and hold property", but you never know how long you'll have to hold...as far as I know, the rules still haven't changed today as that area still hasn't been developed in that county while the other two areas are pretty much fully developed.

A mere mile separated the owners from a small fortune...


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## dBII (Mar 12, 2013)

I've been involved in subdivisions for probably 30 some years, principally on the engineering side, so I am probably that outrageously priced engineer guy you talked about. One piece of advice I can give you is that there are lots of guys out there who are capable of walking you through all of the various layers of that development onion. Most of them are not engineers themselves, but they know lots of firms and work with them on a fee-only basis. One of the troubling things I've encountered is when we spend a whole bunch of your money to tell you that you won't be able to develop it for the reasons you want to. For instance, there may be setback issues, sewage disposal issues, water supply issues that may not be known at the time of the feasibility work, but crop up during the investigation phase. 

I have lots of soils experience (geotechnical, materials and septic) so pm me if you have any questions.


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## Cal (Jun 17, 2009)

The way the original post sounds, it sounds as it you planned on building the entire neighborhood, not clearing and selling off lots for others to build on.


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## [email protected] (Jan 6, 2011)

Just a Guy - that story sounds like a nightmare. Good think you did your homework! Luckily everything has gone smoothly with the council in our area. We do have our zoning and the area structure planned approved now and we're waiting to have the subdivision approval pushed through. Working with the council is definitely a deal maker or breaker though so it's definitely necessary to do some digging.

dBII - when you say you are that outrageously priced engineer, I'm sure you don't mean it in the same context as I meant it. I don't mind paying people for the work they provide. I don't mind paying lawyers and engineers what they deserve. It's when they gouge that I get frustrated. Take what you're worth and what you're owed but some of these people are stealing from their clients. That's what our engineer did. He was stealing from us. Even talking to our lawyer and other developers about what he was doing, everyone was telling us that he was stealing from us, plain and simple. We still haven't found a new engineer. We're taking our time and trying to find someone trustworthy - no easy task. Thanks for the offer to send you any questions, I might take you up on that!


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## nobleea (Oct 11, 2013)

[email protected] said:


> That's what our engineer did. He was stealing from us. Even talking to our lawyer and other developers about what he was doing, everyone was telling us that he was stealing from us, plain and simple. We still haven't found a new engineer. We're taking our time and trying to find someone trustworthy - no easy task. Thanks for the offer to send you any questions, I might take you up on that!


If you truly believe that's the case, and others in the industry are inclined to agree with you, you should lodge a complaint with the provincial engineers association. In Alberta, that's APEGA. The information you need is here:
http://www.apega.ca/Public/member-and-nonmember-complaints.html
APEGA is charged with maintaining the integrity of the profession and licensing or censuring members. They will take a complaint very seriously.


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