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?
kaho674 schrieb:
This wall is definitely very simple. It's just the bricks. Nothing else. I wouldn't accept that without verification. The wall thickness is unusual, even for the presumed construction period; I could imagine it has a concrete core in a broad sense. But that would need to be clarified. From what you’ve described so far, the advisor should probably be called a "speculator," or at best a "brainstorming companion." I haven’t seen anything to suggest that this advisor knows significantly more than those they are advising. Where did your relatives meet this person?
https://www.instagram.com/11antgmxde/
https://www.linkedin.com/company/bauen-jetzt/
The likelihood that the building is made entirely of brick is very high, as it used to be a brickyard. So if they had any materials left, it would be bricks. But I can ask again. That can definitely be clarified.
Mr. X was recommended to us by a construction company with which we have completed several projects over the years. I haven’t met him yet, and he hasn’t invested much time into the idea so far. After all, he hasn’t received any payment or even been formally offered anything yet. So we probably shouldn’t expect too much at this stage. For now, he is only in contact with the building authority / planning department—which is a start, at least. In Dresden, you usually have to wait in a long queue for this. That hasn’t changed from before.
Mr. X was recommended to us by a construction company with which we have completed several projects over the years. I haven’t met him yet, and he hasn’t invested much time into the idea so far. After all, he hasn’t received any payment or even been formally offered anything yet. So we probably shouldn’t expect too much at this stage. For now, he is only in contact with the building authority / planning department—which is a start, at least. In Dresden, you usually have to wait in a long queue for this. That hasn’t changed from before.
I looked up an example calculation for the U-value online.
Estimated starting values from tables and experience:
2cm (0.8 inches) interior plaster, lambda 0.7
60cm (24 inches) brick wall, lambda 0.24
2.5cm (1 inch) exterior plaster, lambda 0.7 (simplified)
Resistance values Rsi: 0.13, Rse: 0.04
If I haven’t made a mistake in the calculation, the U-value for the wall comes out to 0.366. This value could be improved by applying an exterior insulating plaster with significantly better properties.
Since the roof, ceilings, and windows will all be new and in line with current standards, how would you assess this value? Is it rather poor or sufficiently good? Is there a table or document where I can look up this kind of information?
Estimated starting values from tables and experience:
2cm (0.8 inches) interior plaster, lambda 0.7
60cm (24 inches) brick wall, lambda 0.24
2.5cm (1 inch) exterior plaster, lambda 0.7 (simplified)
Resistance values Rsi: 0.13, Rse: 0.04
If I haven’t made a mistake in the calculation, the U-value for the wall comes out to 0.366. This value could be improved by applying an exterior insulating plaster with significantly better properties.
Since the roof, ceilings, and windows will all be new and in line with current standards, how would you assess this value? Is it rather poor or sufficiently good? Is there a table or document where I can look up this kind of information?
Even at the time in question, no one was wasting bricks by the dozen simply because they had direct access to them. The wall thicknesses rather suggest large ceiling spans; if the walls were only carrying the outer walls of the floors above, they would be significantly thinner and taper off toward the top.
That is why, to remain professional, he should currently say nothing more than “nothing definite is known,” “when the rooster crows on the dung heap…,” or “more details only after the autopsy.”
For any speculation about how much insulation will be applied on which side, it seems to me far too early. The same applies to new ceilings or similar elements (which, in my opinion, would economically already call into question the general preservation).
At the moment, three things are important: 1) to know the target; 2) to achieve internal agreement on who will speak; 3) to avoid arousing the interest of heritage conservation authorities.
https://www.instagram.com/11antgmxde/
https://www.linkedin.com/company/bauen-jetzt/
kaho674 schrieb:
I haven’t met him yet, and he hasn’t invested much time into the idea either. After all, he hasn’t seen any money or even been offered anything yet. So maybe we shouldn’t expect too much right now.
That is why, to remain professional, he should currently say nothing more than “nothing definite is known,” “when the rooster crows on the dung heap…,” or “more details only after the autopsy.”
For any speculation about how much insulation will be applied on which side, it seems to me far too early. The same applies to new ceilings or similar elements (which, in my opinion, would economically already call into question the general preservation).
At the moment, three things are important: 1) to know the target; 2) to achieve internal agreement on who will speak; 3) to avoid arousing the interest of heritage conservation authorities.
https://www.instagram.com/11antgmxde/
https://www.linkedin.com/company/bauen-jetzt/
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