The Site and the Number
In March 2024 we put 60.4 acres under contract in Rusk County, south of Henderson, Texas. The price was $4,100 an acre, just under $248,000 for the whole tract. It had 1,100 feet of frontage on a paved county road, a gentle fall to the southeast, and mixed pine and hardwood on the back third. We were buying it for an RV park. Eighty eight pads across the front 34 acres, with the balance held for a second phase.
The pro forma looked clean. Too clean, as it turned out.
What the Map Said
I pulled the county GIS layer and there it was. A water line drawn right along the road past our frontage. Green line on the screen, easy to read, easy to believe. I put $18,000 in the budget for a tap, a meter, and a short run to the first pad cluster, then moved on to the parts I thought were the hard parts. The driveway permit. The septic design. The electric service.
That was the mistake. I treated a map as an answer.
The Call I Should Have Made First
Week three of a 45 day feasibility period, our civil engineer called the rural water supply corporation to ask about capacity. The line on the county map had been drawn from a plan set, not from an as built. The pipe in the ground stopped 1,900 feet north of our property line and had stopped there since 2019, when that extension ran out of money.
I was parked outside the courthouse in Henderson when he told me. That was a bad afternoon. Everything else about the tract was right, and the single line item I had rounded off from a picture on a screen was about to eat the whole deal.
What It Actually Cost
The quote to extend six inch line came back at $38 a foot. That is $72,200 for the 1,900 feet, plus $9,500 for the tap, meter, and backflow assembly. Call it $81,700 against the $18,000 I had penciled in. A $63,700 hole in a project carrying about $210,000 of planned site work.
So we looked hard at a well. Here is the part people miss. On a park that size, the state does not treat you like a landowner with a water well in the yard. In Texas, once you serve 25 people a day for 60 days a year, or reach 15 connections, you are a public water supply system. That means TCEQ rules, a licensed operator, a sampling schedule, storage volume, and pressure requirements. Jake priced it with a driller and a contract operator and we landed within shouting distance of the extension number, with a permanent operating burden bolted on. The well is not the cheap door most people assume it is, and we went deeper on that tradeoff in our septic and well drilling breakdown.
How We Kept It
Three moves saved the deal.
First, we went back to the seller with the engineer's letter and the contractor's quote in hand. Not a story, paper. He came down $30,000. That is not generosity. That is what happens when you show a seller the exact problem the next buyer is going to find.
Second, we asked the water supply corporation for a front foot reimbursement agreement on the new line. Anyone who taps that extension over the next ten years pays a share back to us. There are four unimproved tracts along those 1,900 feet. It is not a guarantee of anything. It is a real chance to recover part of the cost from decisions other people have not made yet.
Third, we phased. Forty four pads in phase one instead of eighty eight. Spread across the full build the water line runs about $930 a pad, which the site carries fine. Spread across phase one alone it was closer to $1,850 a pad, which it could not. So we sized the pipe for both phases, ate the timing, and let phase two inherit an asset that is already paid for. We closed in June 2024 and the line went in that fall.
What We Do Before We Sign Now
Utility maps show intent. Meters show reality. Before an option period starts on any site now, we run the same four checks on every utility.
- Ask the provider in writing for a will serve or service availability letter that names the tract and the connection count. A friendly phone call is not evidence.
- Ask for the as built, not the plan set, and ask the date it was last updated. Five year old drawings are common and nobody volunteers that.
- Drive the road and look for meters, valve markers, and blow offs. Pipe in the ground leaves marks above it.
- Get pressure and capacity numbers, not just a yes. A line that reaches your frontage and cannot hold 35 psi at peak demand is still a line you have to fix.
That is maybe fifteen minutes of work per utility, done before you spend a dollar on engineering. It would have cost me one phone call in March 2024. Instead it cost me three weeks of a feasibility clock and a negotiation I did not plan on having. Cheap tuition in the end, but I would rather have read the syllabus.
I am curious how other developers sequence this. When you walk a new tract, is water your first call or is power? For us it is water now, every time, because power has a price and a lead time while water can have a hard no behind it. The rest of the numbers on a site are only as good as that answer.
The first 44 pads went in last year, and the line that almost killed the deal now runs past four tracts that had nothing at all.