posted 6 years ago
Thank you for the replies!
I do have a title report, maps of the property, and quite a few pages of details to share with potential investors. All this data, along with drone videos and images of the property available for folks who might be interested in investing. I'll summarize below.
Due to the limited time frame and large budget, i do not think that crowd funding or mortgage-based lending will work for my situation. In 2018 did go through a bank and was able to obtain a business loan to move to a larger business property in my area, but we closed "quickly" in just under 90 days. And that was with nearly 40% down, which is not the situation for this parcel. I would need to sell my home in order to buy just one of the ten parcels. Despite that, I will try to find and contact local real estate investors, as it is the only lead i have at the moment, as you said, perhaps they will know somebody who knows how to approach my situation. It's a good idea to try!
The biggest risk for investors seems to be the real estate market, as some of you have mentioned- my calculations are based on the market holding steady in the 1 to 3 year time span, and if it were to fall then it is my understanding that undeveloped land is the hardest to sell, and last time the market fell it was my experience that bare land was the longest to recover. The second biggest risk is the water. Except for one parcel these properties are undeveloped. There is a well on the property for the large fancy house that exists on one of the parcels, and hook ups for at least six of the other parcels are owed to us by the county, however the county may delay, which might mean that we have to create a new well for some of the parcels. We have estimates for wells based on ones already in the area. We could sell the parcels without the water but they will not be as attractive to buyers. As far as old mines, in this county the real estate disclosure laws are strict- you are even legally required to report if a property has been known to be haunted! Boo! Since we have the title report, so the risk of those kinds of surprises on the property is lower than in some counties. Still, if the investor has worries we could do some testing or further research if we start soon.
I would want to be flexible in my plan based on the preferences of the investor, but i imagine that we could create a small holding company for the purposes of buying and selling the property, and i would not own the company but instead manage it. (I would of course want to talk to a CPA about the best way to structure the purchase and sale of parcels to minimize tax exposure during the sales.) If the investor liked this plan, I think it would make sense for me to arrange the purchase of the property on behalf of the company, sell the parcels on behalf of the company- keeping back any monies required for taxes or fees, handling all the paperwork and showings, bringing the return to the investor, and then when all the other parcels are sold (or the investor has otherwise maxed out their return), the company could sell the last parcel to me. We have bids from local developers to put in the required county infrastructure to build on the parcels, and one experienced developer has stated that they would take one parcel in trade for all infrastructure. The strategy depends if the investor would want to have a smaller gain sooner or if they feel they would have a larger gain later. Instead of attempting to sell all parcels as soon as possible, we could sell two or three parcels in the first 90 days or so if my current buyers are appropriate, then wait (a year?) for the infrastructure to be completed, and the parcels would likely sell for more if the market has not reduced. If they wanted to attempt an even higher return (again, assuming a steady real estate market) some of the parcels could be fully developed into lots with houses. (If that was their preference i think i would want to be able to buy my intended parcel after they had a full return on their initial investment rather than at the point of selling all other parcels, because such development could take additional time to complete. This is perhaps over-thinking the situation.) But again i would want to structure the situation to the needs of the angel investor, so this plan is just intended as a starting point.