Who’s Making It in Land Development?

While land development is not an area of real estate that appeals to everyone, it’s one of the most lucrative (and potentially high risk) investment vehicles out there.  Many of the land developers I know, including my Grandpa David Cunningham, my partner Rob Powell, Rob’s father-in-law David Karam, and my co-teacher for Team Gold Mine – Jeff Carter, have years of experience, scars from failure, and a bit of a cowboy or maverick attitude that allows them to keep moving forward even when success is not guaranteed.

Jeff Carter, who lived in California when he got going, started his real estate development career with rehabbing and doing condo conversions on small duplexes and four-plexes and often making a few hundred thousand a pop on those little projects.  Then he broke out of the mold and spent several years developing a large parcel of land in Oregon (which he found while he was on vacation there).

After making over $1 Mil on that project (sweet!) he and his wife decided they could leave their W-2 jobs and go into real estate full time instead.  They moved to Colorado where they work with other friends of mine, Susan and Stephen Wilklow, developing property in Winter Park, CO.

One of their current projects is a mixed-use retail/luxury condo facility right in the middle of downtown Winter Park.  They’ve got retail space to lease on the street level, and luxury condos for vacationing skiers on the upper levels.

Can Anyone Get Started In Land Development?

Armed with Jeff’s expertise and my organizational skills, we are leading Team Gold Mine, a group of Mentor Financial Group, LLC students committed to learning and DOING commercial land development, through their first land development projects.  Our goal is to make a million dollars in profit with the team.

As far as I know, this is one of the few (only?) mentorship programs available for people getting started in land development.

Team Gold Mine has been in operation for about half a year, looking for the right deal – our target acquisition is land for sale for $1 Million or less that can be used for residential development.

After a slow start due to having too many people on the team, Team Gold Mine has thinned its ranks and really hit its stride.  We now have not one, but four deals that we’re actively working on:

1. Under contract – a 38-home site in Canyon City, CO.  They’re now working with an architect and an engineer getting ready to take this project through city planning.
2. Possible Joint Venture Opportunity with an established builder/developer on bank-owned (REO) land that’s already entitled… also in Canyon City, CO.  Team Gold Mine would be coming in with private financing to make this work for the builder who can’t get funding.
3. Penn State – a beautiful forested 214 acre site suitable for 5-10 acre home sites to be built. This one was found through a referral from another Mentor Financial Group student – Patty Smith – who lives in the area and has had this property under option for a few years.
4. One of our team members, Yoko who also lives in California, has been working on a deal in Craig, CO for some time and is getting ready to submit her next LOI to the seller out there, after some good negotiations and coaching already.

It’s exciting to see this group of absolutely new investors tackling these exciting land development projects.

They are minimizing risk by writing up contracts that allow them to delay actually closing on (buying) the properties until they’ve gone through the necessary approval process with the local government.  But there are still some fixed costs involved in having soil tests, engineers, land surveys and other things necessary to bring them through the land entitlement process.  All told, they’ll probably have to invest $20-$40K in research and preparation to determine whether the project is a ft.

Their next big step will be raising private funds for these deals.  Once they master that, there’s no telling how far they’ll go!

Stay tuned for more updates on the progress of Team Gold Mine and the Land Development Challenge!

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