ᐅ Sell the entire property or opt for a partial sale with reinvestment?
Created on: 10 Jun 2018 13:41
K
kaho674
There is a large property in the family located in the center of Dresden. It is a residential area—surrounded by 6-story or even taller new apartment buildings. The land is currently occupied by a very old factory building. The owners do not have the funds to demolish this building and replace it with modern new construction. On the other hand, the ongoing costs and rental income are just about breaking even. If income continues to decline, the property could financially ruin the family.
So the question is what should happen with this "factory land." It is quite certain that it could be completely redeveloped since there are multi-family buildings all around. Adjacent to this land is the family’s own business property (including land), which is not intended to be sold as it is their livelihood.
The immediate idea was, of course, to sell the entire factory land. Its value is estimated at around 1-2 million (minus demolition costs), without going into details here. The money could be taken, divided among the family, and essentially spent without long-term benefit.
However, there are also grandchildren who are struggling to establish themselves in Dresden. The family would like to support them over the long term and believes that a rental property would be ideal. Coincidentally, the grandchildren are trained in property management and could help oversee the project.
So the idea came up to sell only part of the land to gain liquidity, demolish the old building, and construct a multi-family house—ideally in collaboration with an investor who would buy and develop the other half. Of course, everything would need to be carefully calculated to see if this is feasible and if the land will generate enough value.
Is something like this possible, or is it just a scam? What would you do?
So the question is what should happen with this "factory land." It is quite certain that it could be completely redeveloped since there are multi-family buildings all around. Adjacent to this land is the family’s own business property (including land), which is not intended to be sold as it is their livelihood.
The immediate idea was, of course, to sell the entire factory land. Its value is estimated at around 1-2 million (minus demolition costs), without going into details here. The money could be taken, divided among the family, and essentially spent without long-term benefit.
However, there are also grandchildren who are struggling to establish themselves in Dresden. The family would like to support them over the long term and believes that a rental property would be ideal. Coincidentally, the grandchildren are trained in property management and could help oversee the project.
So the idea came up to sell only part of the land to gain liquidity, demolish the old building, and construct a multi-family house—ideally in collaboration with an investor who would buy and develop the other half. Of course, everything would need to be carefully calculated to see if this is feasible and if the land will generate enough value.
Is something like this possible, or is it just a scam? What would you do?
C
chand198610 Jun 2018 15:23Why do liquid funds need to be available for the demolition? If the land is truly zoned for multi-story residential buildings (to be verified), there should be a loan amount based on the property as equity that covers the demolition costs.
But: what kind of factory? Hazardous waste?
If the project is planned, these questions are clarified, and you can present the completed project to the bank, it should be possible.
If there is a lack of experience with project planning, this approach is probably not the right one.
Or are you envisioning a joint venture with someone knowledgeable?
But: what kind of factory? Hazardous waste?
If the project is planned, these questions are clarified, and you can present the completed project to the bank, it should be possible.
If there is a lack of experience with project planning, this approach is probably not the right one.
Or are you envisioning a joint venture with someone knowledgeable?
kaho674 schrieb:
The grandchildren happen to be trained in property management and could help oversee this property, among other things. Up to this point, I might have been tempted to approach my contacts about the project. But partners who think they know what they’re doing are too much of a liability for me. I would rather have skeletons (of archaeological significance) in the basement; those are the more manageable risk.
https://www.instagram.com/11antgmxde/
https://www.linkedin.com/company/bauen-jetzt/
The goal is to generate additional income in the near future that will help support the grandchildren later on. A massive loan is not advisable.
The factory building is a brick structure with wooden ceilings. There is no hazardous waste, but unfortunately, it is not worth renovating.
I had also considered a joint venture, but the family prefers to do their own thing rather than collaborate with outsiders. A clean break is preferable.
The factory building is a brick structure with wooden ceilings. There is no hazardous waste, but unfortunately, it is not worth renovating.
I had also considered a joint venture, but the family prefers to do their own thing rather than collaborate with outsiders. A clean break is preferable.
11ant schrieb:
But co-owners who think they know what they’re doing are too much of a liability for me. I don’t think being co-owners of anything is a viable option. Your contacts are probably in the same situation as my relatives.
I see it more as a clear division or subdivision of the land. Maybe I didn’t make that clear: The plot should easily be enough for 4 houses. For example, we build one house and rent it out, and the buyer builds three houses on (then) their part or something similar, then sells the units or does whatever they want.
C
chand198610 Jun 2018 15:56Then sale and investment of the proceeds. For someone who lets 1-2 million simply disappear... no words.
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