Posted by Eric C on August 20, 2003 at 08:57:16:
Hi Steve -
Unfinished or incomplete subdivisions are everywhere – especially in Texas. Some areas are only now beginning to catch up to the “old” planned developments of the oil boom days.
You might want to take another look at Ray’s answer though. In the past, if roadways did not meet the current standards when completed, they had to be designated as “private” – a term which means, you’re responsible for maintenance( you may need some type of association to make property assessments for repairs), property taxes, and which could bar you from using some financing types when you resell the lots/houses/etc.
Until the roadway is standardized and the county/city/etc accepts it, … and that could be a very long time.
Please note, that my information is dated, but I have run into this more than once in Texas. It didn’t keep me from making money on the deals, but it did slow the project down quite a bit.
Also, I have this vague memory of Texas changing some of the regs on subs and requiring more planning for both water and sewer (which had to be approved)in order for the TNRCC (or whatever agency took over their mandate) to “bless” them.
The main thing is that all these things simply add up to more costs (for you);and while they probably won’t kill a deal, you might not make the margins you planned.
PS - Sorry my information is old – soon to be corrected though! Even so, I can point you to at least a couple of subs complete with paved streets, etc that are still empty. If you can do it without raising too many flags (or showing your hand prematurely), its often a good idea to find out why the lots are still undeveloped/incomplete.
PPS - many counties now have planning authorities too (at least in TX). I’ve even seen an instance or two where a brave individual built out a small sub with a spec home or two only to find that some (or all) utilities would be denied until some changes (needed or not) were made. In other words, compliance was still an issue.