Posted by Jerry on June 10, 2005 at 13:22:10:
Negative Impact would be slow sales (time VS money). Value may be stale no increase in price. Over all home value may see slight decline in sales price. It is just a chance you have to take in the real estate arena. RE has still out performed most other markets in the long run . Still the next best investment next to oil. NO RISK / NO REWARD. You have to take risk to make money. The same holds true for people who are NOT self employed.
Selling Family Farm - Posted by Andy
Posted by Andy on June 08, 2005 at 22:32:28:
My grandmother owns about 200 acres in WI that is now surrounded on all sides by the town. They have two developers interested in buying the property for about 22k per acre. My uncle has control over my grandmothers estate however he is not in a position to make an educated decision. My uncle has gone to my father for advice, because he has been more involved with business decisions throughout his life. My father is now coming to me for my 2 cents because I have been interested in RE investment and have worked as mortgage broker for the past few years.
I believe he said lots were selling for in the 60’s, they are thinking 3 lots/acre
We need help as none of us are experienced with this.
What would be the most lucrative decision for people that are not experienced in something like this?
What would be more profitable than selling the entire block to one devoloper.
I know I have provided limited info on the situation. Please ask me further questions as needed.
Thank You
Andy
Re: Selling Family Farm - Posted by Joanne
Posted by Joanne on June 20, 2005 at 16:49:37:
Hi Andy,
I really just have a question for you, but I’d also like to say that I think the guy who suggested selling only 50 acres now offered the best advice (unless of course you need to settle the estate right away.)
Anyway, my question for you is where you saw the article you mentioned by Ray Alcorn about sf lot development, calculations, etc. It sounds like a great article but I can’t find it through searches.
Hope your deal goes well. You’re doing the right thing asking for help here.
One more thing…where in WI is this? Lot prices sound pretty high. (I’m in WI too.)
Re: Selling Family Farm - Posted by Joanne
Posted by Joanne on June 20, 2005 at 16:47:45:
Hi Andy,
I really just have a question for you, but I’d also like to say that I think the guy who suggested selling only 50 acres now offered the best advice (unless of course you need to settle the estate right away.)
Anyway, my question for you is where you saw the article you mentioned by Ray Alcorn about sf lot development, calculations, etc. It sounds like a great article but I can’t find it through searches.
Hope your deal goes well. You’re doing the right thing asking for help here.
Re: Selling Family Farm - Posted by Robert Rainey
Posted by Robert Rainey on June 12, 2005 at 03:01:01:
Just my 2 cents. Why make any huge moves? Have the developers bid on one quarter of the property. Make them pay for the survey themselves. Sit back and wait until they develope the property. You will then have a clearer picture, plus your remaining 150 acres will be even more valuable because of all the activity. I base my opinion on my observations of two family members in Franklin,TN who owned farms in the hot Cool Springs area and sold them for what seemed like a fabulous price at the time but now seems like a paltry sum after Cool Springs exploded.
Re: Selling Family Farm - Posted by Don Dion
Posted by Don Dion on June 09, 2005 at 18:58:12:
Seem’s like a high price for the land I am looking at land in the western burbs of Chicago 160 acres for $20,000 per acre zoning is for 12,000 sq ft lots with city sewer, city water, utilities to the site edge. They must really want the land to pay a premium and not get the density to cover the cost’s
Re: Selling Family Farm - Posted by Daniel
Posted by Daniel on June 09, 2005 at 11:25:45:
First, you need to get a sense of the real value of the land. Developers might want to take you in if they see that you are not knowledgeable about the market. If lots are selling for about $60K and you have prime land, you should be able to get your money’s worth. Even if you sold the lots for $50K, that should give you $30 million, which is a far cry from the $13.2 million that developers are offering.
Secondly, if your family owns the property outright, you can decide to take your $30 million and run or you can use the land as collateral and develop it into apartment communities, subdivisions, and commercial areas and generate much more than $30 million in profits. Or you can partner with the developers so that you do the loans for all the properties since you are a broker. Just my 2 cents.
Re: development deals - Posted by ray@lcorn
Posted by ray@lcorn on June 21, 2005 at 10:26:53:
Joanne,
My guess is that the poster was referring to a series of posts written last summer. The direct URL to my lengthy post on SFR development is http://www.creonline.com/commercial-real-estate/wwwboard5/messages/13046.html
One of my follow-up posts in that same thread also has info on commercial development and SFR construction.
Now that I re-read those posts I realize there is a ton of info there… I’ll try to get that put into article form later this summer.
In the meantime you will find a lot of material about development in the archives (see link at the top of the newsgroup page). Using “development costs” as the search term gets 118 hits.
ray
Re: Selling Family Farm - Posted by Andy
Posted by Andy on June 09, 2005 at 13:16:06:
Dan,
Thanks for the reply. Actually that is 22k per acre not per lot. So there offer price is 4,400,00 for the 200 acres. And it is 60k per lot for finished lots. I understand that it takes lots of $$$ to develop raw land and that the devoloper needs to make a profit but 22k per acre and selling for 60k/LOT seems like too large of a profit developer and too little for family. Am I wrong? Please help.
I did read Ray’s article about single family lot development and it was very enlightening about the behind the scenes numbers that the devolopers are calculating.
Andy
Re: Selling Family Farm - Posted by Daniel
Posted by Daniel on June 09, 2005 at 13:42:48:
What you really need to focus on is what your land is really worth and try to get as much as possible for it. You cannot control what developers do with land, so you can’t control their profit. But make sure that you get what the land is worth. Another option is use the land as your collateral and partner with the developers and share the profits after based on equity input.
Re: Selling Family Farm - Posted by Jerry
Posted by Jerry on June 10, 2005 at 04:49:39:
I am going to agree strongly with Daniel on this one. Coming from CA and having financed the loans for such large developments. Most deals out this way are done that way with land owner and developers partnering and both sides making a huge profit. Higher a good Real Estate Attorney for this who has experience in aranging such contracts. Do not back down with developers play the game at their level. You are saving them money by partnering with them this way they do not need to finance the land only the improvements.
Re: Selling Family Farm - Posted by Andy
Posted by Andy on June 10, 2005 at 10:29:46:
What are the odds that the value of this property will be negatively impacted by the interest rates going up.