John Bates

Broker Associate

630.718.2098

john.bates@bairdwarner.com

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Naperville

836 West 75th Street
#112
Naperville, IL, 60565

John Bates

Broker Associate

630.718.2098

john.bates@bairdwarner.com

Helping Land Owners and Land Buyers to optimize land for single-family or townhome subdivisions, both owners and buyers must focus on density, infrastructure efficiency, and market positioning.

For Land Owners: Maximizing Value Before Sale

Landowners can significantly increase their "highest and best use" value by preparing the land for development rather than selling it as a raw parcel.

Pre-Entitlement: Securing zoning changes (e.g., R-1 for single-family or R-2/R-3 for townhomes) before selling can command a premium from developers who want to avoid the 6–12 month permitting risk.
Subdivision Potential: Evaluate if the land can be legally "split" into separate taxable parcels. For single-family homes, typical lot sizes average around 8,500 sq. ft., whereas townhomes allow for higher density on the same acreage.
Developer Joint Ventures: Instead of a one-time cash sale, consider a joint venture where you provide the land and the developer provides the capital, allowing you to retain long-term wealth through shared profits.
Feasibility Reports: Having a Phase I environmental report and a preliminary geotech report ready can accelerate the sale process.

For Land Buyers: Risk Mitigation & Development Design

Buyers looking to build subdivisions must calculate "reverse-engineered" profitability—starting with the end sale price of the homes and working backward.

Targeting Density: Townhomes often offer a lower entry price for end-users ($380k vs. $453k for single-family), making them easier to move in high-demand markets.
Efficiency in Design: Use master engineering to reduce infrastructure costs. For example, minimizing road intersections and utilizing variable home setbacks can increase the number of lots per acre while reducing paving costs by up to $900,000.
Due Diligence Must-Haves:
- Topography & Soil: Hilly land or poor soil (non-"perking" for septic or unstable for foundations) can exponentially increase grading and foundation costs.
- Utilities Access: Verify the proximity of sewer, water, and power. If these are far from the property line, the "tap-in" fees and extension costs can break the project's ROI.
Restrictive Covenants & HOAs: When buying for a townhome project, ensure you have the legal right to establish an HOA to manage shared walls, roofs, and amenities.

Strategic Differences at a Glance

Feature	Single-Family Subdivisions	Townhome Subdivisions
Land Ownership	Owner typically owns structure and yard	Owner owns structure and footprint; shared common areas
Profit Driver	Premium lot sizes and custom features	Higher density (more units per acre)
Maintenance	Homeowner responsible for everything	HOA typically handles exterior and grounds
Risk	Lower density limits total revenue potential	Complex legal/HOA setup and shared-wall codes