So let me get this straight, they increased their offer 73k in response to you raising concerns about your neighbors. My first question would be - how much more are they willing spend?
They seem to want the property bad. I'd keep them on the line. I'm not very experienced in property, but why couldn't you negotiate a perpetual easement into the deal for your current homeowners that permits them to maintain trees in a small strip adjacent to each of their own borders? I'd see if something like that and $500k would get the deal done.
Here is the trick to land development.... TIME and MONEY, time always comes first because it costs money... There are 3 ways to tackle a project like this, 6 houses is not a lot by any means, I seen plots in florida with 300 houses go up in a year {although they don't dig foundations and can build year round}, 1 way is to fund it in house, so you use liquid assets to fund the project, think of a cup with 10 ozs in it, you poor out 6ozs to get the project finished and hopefully get 12ozs back in a short enough time where you wont need the 6ozs back...
2nd way is to get loans, this is tough rite now, banks don't care what your track record is, they don't like loaning to builders, they got burnt a lot and its risky, so they charge you, and a lot, plus its hard to get the money once you are approved, they give it to you in stages after 3rd party inspections are done, its a nightmare,
the 3rd way which is the second easiest and second least risky for the builder and most popular- is to use investers, private people thta have money to lend, you show them the plan, they write the check, you give them a payment everytime a property sells and in the end they get a return on it, think about it everyone wins, you share the risk and can make up to 50% in a single year, show me the investment plan that can do that...
there is one more way but VERY hard to coordinate, you sell the houses before they are built, to do this you should own the land outright, this is how I have done a bunch of them, I buy the land, clear it, prep it and in some cases put foundations, and hook the utilities in.. Then advertise it as "Build to suit" then they come pick out their house, put a down payment and finance it all at once when its done... They get the look, space, layout, colors, floors, kitchen ect they want, they are part of the build get to watch it happen and save tons of bank costs and TIME...
So as I hear through the grape vine {we are in a small state} they have investors ready, the other land owner already took a deposit {and they stole that 10 acres}, the bank that holds the note on the foreclosed house already accepted an offer and they have under 30 days to pay for it or they have to go through the entire foreclosure sale again, and as I hear that they bought that house really well too... SO- I am the last piece of the puzzle.....
Tomorrow is the big day, I made up my mind I am going to sell, she called me today and asked what I was thinking. Now she knows I am in business and have developed land myself obviously, so she knows I know their offer is STRONG, but here is the wild card.... Sure they know I don't want to screw over my old clients, BUT thats not why they came back so strong on the offer.. They know I can walk in with out the time it takes to coordinate investors and pull the rug out, in under 30 days their contract with the bank is up {I know the rep at the bank and can walk in on Sept. 1st with cash and close by the 7th on that foreclosed house}..
So no investor is going to invest in half of this project, and honestly they cant even get half with out my land, it costs money to bring in a street, even with buried electrical, well water, no gas lines, and no sewer, still very costly, not worth doing for 2 houses....
SO thats why the offer jumped, the owner of the company called a mutual friend who called me and told me what he told him, and he came to the conclusion I can walk into his deal self finance and make a million dollars for my self....
So I my office manager {she is a Real Estate Attorney} is drawing up a sale agreement for $347,500 which I am going to bring with me tomorrow, I am going to ask what the most they will bring to the table is and if its higher than that I will keep it in my folder if its lower I will bring it out as my final offer..... I have been talking to my wife and a few friends about this {as well as you guys} for a week now, if my old customers are not happy, I am going to offer to put their fair market values towards a new house, I own another piece of land {big enough for 2 nice lots} about 3 miles from this piece {I was going to get it rezoned commercial in the future} and I will build them 2 new houses and sell their houses...
My wife thinks that is the worst idea she ever heard, she thinks its insulting to even bring it up and doesn't want me to say it out loud, lol!!!! She said "just tell them this is how it is, we are selling it because its a super fantastic deal, let us know if we can do anything for you but this is business" , the problem with that is, I have to be the one to say that, lol, she gets to see them in the super market and say, "oh I don't know, you know how he is, all business"....
ANYWAY, so I made up my mind, I am selling it, and hopefully it does not create hard feelings... I will update tomorrow morning after the meeting....
