Developing and Building 28 Townhomes at 28 Years Old / Part 1: Site Development

Part 1 of the Fircrest subdivision: the site development phase on a 28 townhome project.

This is site development, the part of the business that happens entirely underground. Fircrest is a 28 townhome project, and phase one is four duplex buildings, eight units. Before any of them can be built, the land has to become legal lots, and that is a different job from construction.

Development is horizontal, construction is vertical

Development is everything you see under the ground: sewer, water, power, storm, curbs, sidewalks, pavement, grading. Construction is everything that goes up. Arthur is not a GC. He hires one for the vertical work and runs the horizontal himself, because development, negotiation, and getting these properties under contract is the part he actually loves.

The paperwork sequence

1. 01

   Preliminary approval

   About a year of city process to confirm the land is approved for what the code allows.

2. 02

   Civil engineering

   A civil engineer designs how the site actually gets built.

3. 03

   Site work

   Excavators and underground contractors put in the sewer, storm, water, power, grading, curb, sidewalk, and pavement.

4. 04

   Submit the plat

   The plat is the document showing every legal lot you are creating. The city reviews it, then the county reviews it against what was approved.

5. 05

   Recording

   The county records it, and one big parcel legally becomes many small ones. Only then can you submit building permits.

Why the 2x4s are sticking out of the ground

When laterals are installed, the contractor marks where each one stubs out with a 2x4, spray painted by utility: green for sewer, white for storm. Months later, when the building goes in, the excavator digs at that stake knowing exactly where the connection point is. Water usually just gets a meter box rather than a stub.

The trench box, and why you never pay before it is right

The steel plates in the road cover open trenches where manholes will go, required every so many feet depending on the jurisdiction. Down in the trench, a shoring box keeps the walls from collapsing on whoever is connecting the pipe.

Asked whether a given pipe was sewer or storm, Arthur said it did not matter to him. He hired the experts, they are following plans the city stamped, the city signs it off, and he does not pay the bill until it is done correctly. That is the whole management model.

Soil decides more than people expect

After grading, a geotech engineer tests the soil for compaction, because dirt that settles later takes your house down with it. Big rollers compact it, then the geotech confirms it will hold. Bad soil gets removed and replaced with structural fill, and sometimes rock, gravel, or sand gets brought in.

The other half is infiltration: how fast the soil absorbs water. If it rains 5 inches in an hour and the soil infiltrates 10 inches an hour, you are fine. Clay soil that infiltrates 1 inch an hour means that same rain sits for five hours. Sandy or rocky soil is what you want, and good infiltration was one of the reasons this site was worth buying.

The easement that cost three units

During the city process, before closing, Arthur found a 10 foot water easement running across the property, a strip he could never build on. It removed three units from the plan, taking the project from 31 to 28. Because he had not bought the property yet, he went back to the owner and negotiated the value of that lost land off the purchase price.

How land gets priced on a development deal

There are several conventions: per acre, per usable acre, or per unit. On townhome lots, $30,000 per unit was fair here. On a 10 acre development you might work at $100,000 to $300,000 an acre. But the convention is only a sanity check. Arthur runs it backward: what do the finished lots sell for, what does it cost to develop, what do the soft costs to get approved run, what profit do I want, and what is left is the land price. He wants 25% to 30%.

And the value of land changes entirely with what you are allowed to build on it, which is why code is the one thing he insists on being expert in. He hires civil engineers, geotech, surveyors, and underground contractors. He does not need to know their jobs. He needs to know what the site can legally hold, because that is what sets the price.

Phase it

Phase one is eight units, not 28, deliberately. You do not want interest payments running on all 28 townhomes at once. Build eight, sell them, then start the next group.

Watch more on Arthur's channel.

Common questions