Property: 172 Acres | Mohave County, AZ | Price: $1.7 Million Contact: Todd 702-672-1582

[email protected]

Strategy: Low-Density 4-Acre Lots

This calculation demonstrates why building fewer, larger homes (Ranchettes) yields a safer and faster profit margin than high-density subdivisions, specifically by avoiding public water/sewer costs.

Financial Feasibility Analysis: Residential Ranchette Development

A. Land Utilization & Product Mix

  • Total Gross Acreage: 172 acres
  • Infrastructure Deduction (Roads/Easements): ~12 acres (7%)
  • Net Saleable Acreage: 160 acres
  • Proposed Lot Size: 4 acres (Premium Estate Lots)
  • Total Inventory: 40 lots

B. Revenue Projection (Top Line)

  • Estimated Sale Price Per Lot: $85,000-$125,000

    • Basis: Comparable 1-acre lots sell for $50k-$60k; 4-acre lots command a premium for privacy and space.
  • Gross Revenue (Total Sales):

    • $85,000 x 40 Lots = $3,400,000
    • $125,000 x 40 Lots = $5,000,000

C. Cost Estimation (Expenses)

  • Acquisition Cost (Land Price): $1,700,000
  • Soft Costs (10%): $170,000

    • (Includes: Surveying, Engineering, legal, Marketing, Permits)
  • Hard Costs (Infrastructure): $350,000

    • (Includes: Grading, Gravel Roads, Survey Markers, Dust Control)
    • Note: Zero cost for Water/Sewer (Buyer installs private Well/Septic)
  • Gross Revenue (Total Sales):

    • $85,000 x 40 Lots = $3,400,000
    • $125,000 x 40 Lots = $5,000,000
  • Total Project Cost: $2,220,000

D. Profitability Metrics (Bottom Line)

  • Net Profit:

    • @$85,000/ LOT ($3,400,000 – $2,220,000) = $1,180,000
    • Return (Margin): ($1,180,000 / $2,220,000) = 53%
    • Break-Even Point: 26 Lots sold.
    • @$125,000/ lot ($5,000,000 – $2,220,000 = $2,780,000
    • Return: ($2,780,000 / $2,220,000) = 125%
    • Break-Even Point: 18 Lots sold.

Risk Assessment & Challenges: Residential Ranchette Development

The Hurdle: Why isn't this "Easy Money"? While Ranchettes are safer than high-density subdivisions, they are not risk-free. The developer must solve the "Utilities" puzzle to give buyers confidence.

A. Groundwater Uncertainty (The "Well" Gamble)

  • The Fact: The property does not have city water. The listing explicitly states: "Water: Would need to dig a well".

  • The Problem: In Mohave County, the water table varies wildly. Water might be found at 200 feet.

  • The Cost Risk: A standard well costs roughly $15,000. However, being in the Colorado river basin this is low risk.
  • The Cost Risk: A standard well costs roughly $15,000. However, being in the Colorado river basin this is low risk.
  • Resolution: Drill a test well prove that affordable water is available

B. Market Absorption (Speed of Sales)

  • The Problem: Selling 40 luxury lots is different from selling cheap small plots. The pool of buyers who can afford an $85,000+ lot plus the cost of building a custom home is smaller.
  • The Risk: Absorption Rate. If the market slows down and the developer only sells 5 lots a year, the project could take,5-8 years to sell out
  • Holding Costs: During this period, the developer must pay property taxes and loan interest on the remaining unsold land, which eats into the profit margin.

C. Dust Control & Grading Permits

  • The Requirement: Even for "Ranchettes", the developer must build access roads to each lot.
  • The Problem: Mohave County has strict air quality regulations regarding "Fugitive Dust". Grading dirt roads on 172 acres kicks up dust.
  • The Cost: The developer will need "Dust Control Permits" and water trucks spraying the ground during construction.

Financial Feasibility Analysis: Solar Development Project

Utility-Scale Solar Farm

Annual Revenue Projection (Power Generation); Limited Infrastructure development

  • Project Size Capacity:
    • Standard Requirement: ~7 Acres per 1 MW
    • Total Capacity (172 Acres / 7): ~24.5 MW
  • Revenue Potential:
    • Estimated PPA Revenue (Power Purchase Agreement): ~$60,000 per MW/Year (Conservative Estimate)
    • Annual Gross Income: 24.5 MW x $60,000 = $1,470,000 Per Year
  • ROI Outlook:
    • With an annual income of ~$1.5M, the land cost ($1.7M) is recovered in just over 1 year of operation (excluding equipment costs).

A. The Zoning & Entitlement

  • Current Status: The property is currently zoned AR (Agricultural-Residential).

B. Interconnection Capacity Study

  • The Advantage: The physical solar lines are only 350 feet away. With existing power lines along 3 sides of the property. see map and images.

We offer Flexible Terms. You can pay a down payment now, and we can discuss EMI options. This lets you start your project without using all your cash upfront.