Vacant Family Land Confusion??
I have a very difficult situation. My family owns about 4 acres of land on the waterfront of VA. The land is split into 4 sectors and I'm trying to aquire the land to develope a townhouse community.
1) How can I purchase the land from my other relatives giving them cash in hand or percentage of future rental profits?
2) Once obtained how can I turn this land into cash to cover the developments hard and soft cost or gain funding for the project?
3) Has anyone done a deal like this that can list steps to take and pitfalls I should avoid?
I am an architect so the drawings will be done by me to cut cost and really to get the look and quality I want. Please any suggestions or advice would be greatly appreciated.
Thanks in advance
Ken
Ken,
It sounds from your post that you want to actually build out the property as opposed to getting the approvals and selling the property to a builder. Is this correct?
Also, I think that before you try to buy the property from your family, you might first want to analyze the suitability and economic feasibility of doing the project. In that connection, I would verify current zoning to make sure it would permit townhouses. I would then get a handle on site yield/density, how the property would lay out ballpark improvement costs.
If you do decide to make an offer, you should make it contingent on obtaining all governmental/other approvals you would need to do the project and throw in a contingency for feasibility period of at least 90 days for additional due diligence (environmental, topo, boundary, wetlands, etc.) whereby you can terminate the deal at the end of the feasibility period if you don't like what you find out.
What Nancy is saying Due Dilligance.
Frankly I would form a limited partnership and let your relatives become part of the act. You could name it after your family ______ Landing.
If all goes well they will all love you for the monies they will gain. If not some of them might like to move in and keep you company at ____Landing.
Having done that you have the land. You do your usual beautiful renderings and studies and draw plans of this grouping or cluster depending on how many and how layed out. Then you estimate your costs for permits and other goodies and in you go to the bank and lay it all out in front of them. They will as usual suggest some items that would completely destroy the Architectual design features, but forgive them it comes with the suits.
I would of course shop several lending institutions. You will know what I mean by that word when you meet the people who work there.
Ok now you have funds standing by and away you go. Site plans, improvements and the final go around you build the houses.
You sell the houses and you move away and live somewhere else.
End of story. Enjoy. Lucius