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:
I believe offices are the last thing anyone needs. Wrong. Although there is an oversupply, this is mainly due to poorly suitable properties.
Laypeople wonder why stylish office floors remain unsold, everything is top-notch, toilets are immaculate, and so on. But: no raised floors, underground parking not suitable for SUVs, and to complete the picture, a discount retailer as the main tenant on the ground floor :-(
nordanney schrieb:
Old silk weaving mills or similar buildings. But none of them are really attractive A good example that it’s not the most attractive properties that get developed, but those with the most determined investors.
What is often overlooked is the management of tenant mix: a financial broker does not want to be next to a fast food kebab shop. Often, a concept for success is simply missing, so the union office ends up between the fitness studio and the locksmith — then the fertility doctor won’t move there.
https://www.instagram.com/11antgmxde/
https://www.linkedin.com/company/bauen-jetzt/
Well, I don’t really think it’s so massive that it requires something like a city-scale development plan. It is a larger building, yes. But it’s not an independent district. There are already tenants, which may reflect the current demand to some extent: offices for a construction industry surveyor, an artist, a tool supplier, storage space for files – so far.
One could also consider having apartments on the upper floors and workshops or similar on the lower floors. But we’re not that far yet.
One could also consider having apartments on the upper floors and workshops or similar on the lower floors. But we’re not that far yet.
kaho674 schrieb:
Well, I don’t think it’s that monstrous that it requires city-like development planning. The family doesn’t have to be large for it to be better not to seat Luise next to Uncle Rudi. It’s not much different when it comes to a property.
https://www.instagram.com/11antgmxde/
https://www.linkedin.com/company/bauen-jetzt/
Incredible but true – today the drillers arrived to take samples in order to calculate the structural stability of the walls. I need to check how long they had to be persuaded... Moment... the decision and the order were both made on January 16th. Now it’s April 11th – nearly 3 months just to carry out a test drilling. Hats off! If this keeps up, it will be a century-long project.
I would like to provide a final update here. The soil survey and structural analysis have now been completed. The results are disastrous for us. The existing building is standing on an unstable pile of debris—similar to a demolition heap. Expanding the building with additional load on the foundation is therefore not possible.
For a new construction, excavation would be required up to 7 meters deep (23 feet). Since the location is on a slope, it would still be ideal for residential buildings with an underground garage. However, for us, this is unrealistic. Therefore, everything will remain as it is. If the need becomes urgent, selling the property would be the only option.
For a new construction, excavation would be required up to 7 meters deep (23 feet). Since the location is on a slope, it would still be ideal for residential buildings with an underground garage. However, for us, this is unrealistic. Therefore, everything will remain as it is. If the need becomes urgent, selling the property would be the only option.
kaho674 schrieb:
The existing building stands on an unstable pile of rubble – similar to a demolition heap. Therefore, any extension of the building that would add more load to the foundation is ruled out. That sounds unfortunate – but every end also brings a new beginning.
https://www.instagram.com/11antgmxde/
https://www.linkedin.com/company/bauen-jetzt/
Similar topics