Greater Orlando Real Estate Developers when purchasing real property for development, whether vacant land or land for re-development, need to know if the property will yield the revenue that they envision in order to make the project feasible. To accomplish this, the real estate developer needs to know how much of the property is usable, how many units can be permitted on the property and how much the total development cost will be.
Due-Diligence refers to all of the investigations into a property before purchase to determine these parameters. On vacant land or land that will be re-developed due-diligence investigations provide the real estate developer with critical information and opinions from a qualified Orlando civil engineer on the viability of the purchase for its intended use.
It’s assumed that prior to submitting a contract for the purchase of the real property, the Orlando real estate developer has determined that the property’s location and size is suitable, from a marketing and commercial perspective, for its intended use. The next step is to determine if the development of the property is viable and feasible from a land planning and civil engineering perspective. An Orlando civil engineer can assist the developer in making this decision.
Land planning and civil engineering due-diligence involves research into the property to determine the viability and feasibility of developing the property for its intended use. Due-diligence typically includes the researching the following:
- Size, shape, locational setting and topography.
- Property’s legal encumbrances due to easements, rights of way acquisition, or eminent domain.
- Property’s future land use designation and zoning and whether it will be necessary to re-zone the property.
- Review of future land use regulations, zoning regulations and the land development code.
- Uses and characteristics of adjacent properties.
- Presence and extent of wetlands and/or threatened and endangered species.
- Soils types and the depth to seasonal high water table.
- Availability of water and sewer utilities.
- Regulatory agencies that will have jurisdiction in the civil engineering and land planning.
- Storm water management and drainage criteria and how these regulations will impact the civil engineering design and the size of the retention pond.
- Phase 1 environmental site assessment to determine if there is any soil or groundwater contamination on the site.
- Determine net land available for construction of the desired real estate product type.
- Traffic and transportation characteristics and regulatory requirements.
- Preparation of preliminary land use plans or site plans to determine the yield of the property relative to the property’s proposed use as either residential, multi-family, commercial or industrial real estate development, or mixed use.
- Pre-application meetings with the regulatory agencies that will have jurisdiction on the project.
- Refine the preliminary site plan based on meetings with governmental agencies.
- Prepare an engineer’s opinion of construction costs and land entitlement costs. Some of the soft costs includes consulting fees, impact fees and permitting fees charged by governmental agencies.
In Orlando Florida, once these land planning and civil engineering factors are determined and the viability and feasibility of the real estate development is established, the due-diligence phase of the property is complete. The real estate developer then needs to determine whether it’s a good business decision to move forward with the project.
The real estate developer along with their attorney need to negotiate the terms and conditions of the purchase contract. Typically, real estate purchase contracts, for development of the real property, include terms and conditions to allow the real estate developer a period of time to make the due-diligence investigations and to obtain the entitlements from the governmental agencies to construct the proposed project. This allows enough time to obtain the necessary zoning of the property and prepare the land planning and civil engineering plans and documents required to obtain all of the land development construction permits. Your Orlando civil engineering consultant can assist you with this.
The Orlando civil engineering consultant will assist the developer in determining the complexity of the project and how long it will take to move through the various phases of the entitlement and permitting process. This could take anywhere from nine (9) months to two (2) years. These time frames can then be negotiated into the purchase contract in order to minimize the risk of the purchase for the real estate developer.
Owners of property generally want to close on the sale as soon as possible. However, it’s not realistic to move too quickly due to the inherent risks associated with the entitlement process in the Greater Orlando, Florida area. The real estate developer should consult with the Greater Orlando civil engineer to establish the likely schedule for obtaining all the entitlements and permits and preparing the design of the project.
