Selling your home to developers (1 Viewer)

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I am thinking you hold the trump card(s) here, so don't fold to the pressure. Milk every last dollar out of the developer. They can afford to give you your riches and still turn a nice profit. They just flexing their muscle in hopes you just cave.


I agree generally, but finding the magic number is hard to do. The offer they gave me was reasonable, but it doesn't seem worth the move. There is tremendous growth in the area, so the amount they gave me wouldn't even allow me to replace the house I live in right now.

Does 150% seem reasonable? This is totally outside of my knowledge base. Never dealt with commercial real estate.

My guess is 150-200% of market value of similar home seems right, but you can't exactly goto zillow and figure it out.

My cousin's husband used to do commercial deals, want to ask him, but they are busy, and not sure he even likes me.
 
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Just make sure property taxes are paid in full. They will try any angle to get it.
If they need it, they will pay

I do monthly payments on property taxes, so that's covered. Also, have property insurance, just in case they try to burn my house down. They parked a broken down truck in front of my house, that leaked oil, and set the alarm off in the middle of the night, until the city towed it.

They are dirty. Not sure what their next move is, but I'm starting to talk to people, so if anything goes down, they have their suspects.
 

efil4stnias

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I agree generally, but finding the magic number is hard to do. The offer they gave me was reasonable, but it doesn't seem worth the move. There is tremendous growth in the area, so the amount they gave me wouldn't even allow me to replace the house I live in right now.

Does 150% seem reasonable? This is totally outside of my knowledge base. Never dealt with commercial real estate.

My guess is 150-200% of market value of similar home seems right, but you can't exactly goto zillow and figure it out.

My cousin husband used to do commercial deals, want to ask him, but they are busy, and not sure he even likes me.

and thats what it all boils down to right? the ability to "replace" and "reasonable", while nice, doesnt afford you the ability to "replace"

so that would be my stance. If new homes are selling for $200 /sq ft, then they should have no issue in paying you ( especially if that land they need to complete their project is worth 10x that over 5, 10 or 15 years ) the amount it would cost you plus expenses ( moving ) and some sentimental value.
 

efil4stnias

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some developers are notorious for "cutting costs" at every chance.

Think about it- any $1 they save is $1 more in profit- so it stands to reason they will do everything as cheap as possible in certain aspects of development. Its just the inherent nature of developing land.
 

BELOWSEALEVEL

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I do monthly payments on property taxes, so that's covered. Also, have property insurance, just in case they try to burn my house down. They parked a broken down truck in front of my house, that leaked oil, and set the alarm off in the middle of the night, until the city towed it.

They are dirty. Not sure what their next move is, but I'm starting to talk to people, so if anything goes down, they have their suspects.
Time to invest in surveillance cameras.
You need more than a doorbell cam
 
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and thats what it all boils down to right? the ability to "replace" and "reasonable", while nice, doesnt afford you the ability to "replace"

so that would be my stance. If new homes are selling for $200 /sq ft, then they should have no issue in paying you ( especially if that land they need to complete their project is worth 10x that over 5, 10 or 15 years ) the amount it would cost you plus expenses ( moving ) and some sentimental value.

Thanks for the support. I agree generally, the city I live in will pretty much explode in property values in 5 years. If they get this deal down, pretty sure their whole family retires, or they just keep building their empire.
 

harschman

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and thats what it all boils down to right? the ability to "replace" and "reasonable", while nice, doesnt afford you the ability to "replace"

so that would be my stance. If new homes are selling for $200 /sq ft, then they should have no issue in paying you ( especially if that land they need to complete their project is worth 10x that over 5, 10 or 15 years ) the amount it would cost you plus expenses ( moving ) and some sentimental value.

This is pretty much what I was going to post.

How much would it cost to purchase a new house in the location where you want to live if you were to sell your current house? I think that would be my lowest acceptable offer to include the cost of the move.


I know other places are bad, but we ended up buying a little further away from the water than we wanted because the prices here on the panhandle are stupid. I know with a VA loan I was at the bottom of the stack when it came to the multiple offers which every house we offered on had and many are cash offers which are nearly impossible to compete against.

I also wouldn't want to be a renter in this market since homeowners are kicking tenants out left and right here so the owners can take advantage of the market and sell their houses.
 
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This is pretty much what I was going to post.

How much would it cost to purchase a new house in the location where you want to live if you were to sell your current house? I think that would be my lowest acceptable offer to include the cost of the move.


I know other places are bad, but we ended up buying a little further away from the water than we wanted because the prices here on the panhandle are stupid. I know with a VA loan I was at the bottom of the stack when it came to the multiple offers which every house we offered on had and many are cash offers which are nearly impossible to compete against.

I also wouldn't want to be a renter in this market since homeowners are kicking tenants out left and right here so the owners can take advantage of the market and sell their houses.

Not only are they selling due to the market, buy landlord's are worried, that they won't be able to evict the tenants due to future Covid rules.

O.k., so the bench mark for lowest acceptable offer is a brand new home that is similar, in the same city. Noted. I like that!
 

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Not only are they selling due to the market, buy landlord's are worried, that they won't be able to evict the tenants due to future Covid rules.

O.k., so the bench mark for lowest acceptable offer is a brand new home that is similar, in the same city. Noted. I like that!

True. I forgot about the Covid rules.

With the new build timelines/costs, it probably wouldn't have to be new, but a comparable or whatever size/style of home you would want. Whatever the cost is of a home that would would want to move into if you sold yours. That's how I would look at it. Any for me, I don't believe my wife and I would be okay with doing the trailer thing or temporary living for an extended amount of time just sell and find something later.
 
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Also find your top price, then tell them you’re adding 5% for every dbag move they pulled

I talked to a sales rep for a commercial construction company, he said, sometimes investors by the block, and sell it off to large developers. So, might not even dealing with developers.

He said, it will cost 9-10 million do build a 6 story building, over 4 lots. Since they have 6 lots, a developer will have to swallow about 15 million, plus the purchase price of the lots, and whatever it costs to re-work the zoning code, to build their massive complex.

I'm guessing a developer either tries to make 4 million after a couple of years with condos, or build apartments, and have a positive cashflow in a couple of years. Either way, there is risk involved, and I shouldn't be greedy, but just take a offer that will work, or hold on until it makes more sense.

He also said, a 50% mark up is unreasonable, but it's my job to negotiate, and find out what I can get. He said, try to get 100k above market value, and your are doing pretty good.

I think my bottom price will be 100k over replacement value, and I'm doing good. Anything below this, isn't worth my time.
 

efil4stnias

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I talked to a sales rep for a commercial construction company, he said, sometimes investors by the block, and sell it off to large developers. So, might not even dealing with developers.

He said, it will cost 9-10 million do build a 6 story building, over 4 lots. Since they have 6 lots, a developer will have to swallow about 15 million, plus the purchase price of the lots, and whatever it costs to re-work the zoning code, to build their massive complex.

I'm guessing a developer either tries to make 4 million after a couple of years with condos, or build apartments, and have a positive cashflow in a couple of years. Either way, there is risk involved, and I shouldn't be greedy, but just take a offer that will work, or hold on until it makes more sense.

He also said, a 50% mark up is unreasonable, but it's my job to negotiate, and find out what I can get. He said, try to get 100k above market value, and your are doing pretty good.

I think my bottom price will be 100k over replacement value, and I'm doing good. Anything below this, isn't worth my time.
Then you are dealing with speculators and hold the leverage. They cant sell the "block" because they don't own the block.

So it's either what you want or they can sit on their 5/6th of a block, continue to watch their investment fall in value and think of all the other uses their money could have been put to instead of owning land they can't sell or develop.

In other words, you sit in the cat bird seat.
 
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Then you are dealing with speculators and hold the leverage. They cant sell the "block" because they don't own the block.

So it's either what you want or they can sit on their 5/6th of a block, continue to watch their investment fall in value and think of all the other uses their money could have been put to instead of owning land they can't sell or develop.

In other words, you sit in the cat bird seat.

I think you are right. They need my land to package a good sale, and I don't think they want to be partners with me. lol. That's why they are acting so unprofessional, because they are "speculators", not corporate developers.

Thanks for helping me think this through people, just felt overwhelmed, and didn't know how to proceed. Now I have a game plan, instead of swinging in the dark.

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DaveXA

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I think you are right. They need my land to package a good sale, and I don't think they want to be partners with me. lol. That's why they are acting so unprofessional, because they are "speculators", not corporate developers.

Thanks for helping me think this through people, just felt overwhelmed, and didn't know how to proceed. Now I have a game plan, instead of swinging in the dark.

View attachment 160044
And let us know how it goes. Good luck to ya!
 

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