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?
HilfeHilfe schrieb:
Who is supposed to finance this thing? We are not anywhere close to that yet. At the moment, we are just checking with the city to see if anything is even possible and, if so, what. And in Dresden, you really have to wait your turn if you want anything from the building authority / planning office.
kaho674 schrieb:
We’re still a long way from that. At the moment, we’re just asking the city whether anything is possible at all, and if so, what. And in DD, you really have to wait your turn if you want something from the building authority. That’s a good idea. If there was commercial use there before and also nearby, I’d rather assume it’s designated as a commercial area rather than residential. Being so close to housing, though, it’s probably classified as “non-disruptive” commercial use. If that’s the case, the land-use plan would need to be amended first. The only other option I can imagine is selling or leasing the land to a supermarket. How is local supply there? You mentioned larger apartment blocks with retirees, who are generally less mobile than younger people.
kaho674 schrieb:
But it’s already clear that this probably won’t happen... If your relatives are not the ones who are supposed to invest, I would first “read everything carefully.”
kaho674 schrieb:
Apparently there is a first project “draft”: 15 million euros. I haven’t seen yet what it’s for or anything at all. You can’t really do it like this: the first thing a normal person does when confronted with such numbers is to be shocked. The second thing is to think that those are uncomfortably large figures and that the developer must have misunderstood something in the project.
https://www.instagram.com/11antgmxde/
https://www.linkedin.com/company/bauen-jetzt/
11ant schrieb:
...the first thing an average person does when seeing such numbers is to be shocked. The second is to think that these are uncomfortably large figures and that the planner must have misunderstood something.Well, I haven’t seen anything yet—only heard the number and that only half the land is being used for it. So, the actual building can probably only be that “small.” But it’s pointless to speculate about it. If I find out more, I’ll share it with you... (Haha).