How to structure a land development deal (for engineers who want to own projects)
Most civil engineers design subdivisions for other people. Here is how to start owning the projects yourself. I run FEREST Development Services and M2 Engineering. One does the engineering, the other does the deals. Here is the basic structure I use. Step 1: Find the land. Look for raw acreage on major roads (arterials or collectors) in growing cities. In the RGV, I look along SH 107, US 83, and expanding city ETJs. The land needs to be annexable or already inside city limits with access to water and sewer. Step 2: Run your numbers BEFORE you make an offer. Use a simple proforma: Land cost + construction cost + soft costs (engineering, permits, testing, financing) = total investment. Divide by buildable lots = cost per lot. Compare to what finished lots sell for in that market. Real example: Angelica's Dream V2 in Weslaco. 10 acres, $250K purchase price. 47 lots planned. Estimated EOPCC around $1.5M all-in. Cost per lot: roughly $32K. Market value of finished lots in that area: $45K to $55K. That is a $600K to $1M spread on the deal. Step 3: Control the land with a contract, not cash. Put $5K to $10K in earnest money. Build in a 60 to 90 day feasibility period. During feasibility, do your drainage study, check utilities, confirm zoning, and get your preliminary plat reviewed by the city. If anything kills the deal, you walk away and get your earnest money back. Step 4: Get your engineering done right. This is where being the engineer gives you an edge. You control the design, timeline, and cost. You know exactly what the project needs before you close on the land. Step 5: Fund the construction. Use a combination of your own equity (10% to 20%), investor capital, and a construction loan. The EOPCC is your loan document. The lender funds draws based on completed milestones. The biggest advantage engineers have: you already know what things cost. Most developers are guessing. You are not. www.ferest.dev