Has anyone had experience with selling a vacant lot and tied with the sale, a turnkey contract for a single family dwelling?
Basically, I own land, can develop the design / get permits and get a contractor on board with pricing, but no money to put down for a construction loan (at least not in the short term). This would be my first design-development project, so I don't think investors would be interested. So, my thought is to work with my real estate agent to list the land with a turnkey contract. I would put together some renderings, floor plans, etc. and offer options to customize the design (kind of like buying a car). The project delivery would be design-build, so more like a vendor relationship with the buyer.
Custom home builders do this all day, but in my case just a single lot with limited means for financing.
James Petty
Jun 20, 18 1:01 pm
"no money to put down for a construction loan." - Do you own the land? You can use land itself as the equity required for the construction loan if the value is high enough for what you want to build. Prepare some drawings and get the entitlements, and that adds even more value for your equity in the construction loan. You should be there at that point. See architectanddeveloper.com
cacti
Jun 20, 18 11:19 pm
Hi James, thank you for the advice. I did run some numbers and even with the equity of the land and entitlements, I would have to come up with a good chunk of cash, but perhaps I should be more patient and save up for it. I also just purchased your book, feeling inspired!
whistler
Jun 20, 18 1:51 pm
Buyers are fickle; they either like to walk into a fully staged and completed design that they either like or don't, but are rarely interested in a design concept adapted for a lot. They would prefer to scrap the design and do a complete custom design that suits them. I see people all the time trying to sell the the "lot with plans" and rarely does it get sold and built that way. Spec house builders are good at this because they can and will deliver the final house design for a set price, probably something you might be challenged to achieve.
geezertect
Jun 20, 18 2:03 pm
James Petty above is right. Subordinate the land to a construction loan and try to convince the bank that you can be trusted to carry through. What you're proposing would require you to first sell the buyer on the design, then convince him that you can get it built, then the two of you would have to convince a bank to make the loan. Too many balls to try to juggle on your first venture.
reedgreenfield
Oct 16, 19 12:39 pm
I have agreement LAND For Sale Southern California 43 Acres
Non Sequitur
Oct 16, 19 12:51 pm
Cool. will you take $4 canadian dollars? That two toonies! Think about those poor polar bears. They need a new home.
reedgreenfield
Oct 16, 19 2:21 pm
Not here for jokes you not interested cool
Non Sequitur
Oct 16, 19 3:00 pm
was not a joke. I see you're willing to negotiate. Will you take a crisp $5 bill then?
Has anyone had experience with selling a vacant lot and tied with the sale, a turnkey contract for a single family dwelling?
Basically, I own land, can develop the design / get permits and get a contractor on board with pricing, but no money to put down for a construction loan (at least not in the short term). This would be my first design-development project, so I don't think investors would be interested. So, my thought is to work with my real estate agent to list the land with a turnkey contract. I would put together some renderings, floor plans, etc. and offer options to customize the design (kind of like buying a car). The project delivery would be design-build, so more like a vendor relationship with the buyer.
Custom home builders do this all day, but in my case just a single lot with limited means for financing.
"no money to put down for a construction loan." - Do you own the land? You can use land itself as the equity required for the construction loan if the value is high enough for what you want to build. Prepare some drawings and get the entitlements, and that adds even more value for your equity in the construction loan. You should be there at that point. See architectanddeveloper.com
Hi James, thank you for the advice. I did run some numbers and even with the equity of the land and entitlements, I would have to come up with a good chunk of cash, but perhaps I should be more patient and save up for it. I also just purchased your book, feeling inspired!
Buyers are fickle; they either like to walk into a fully staged and completed design that they either like or don't, but are rarely interested in a design concept adapted for a lot. They would prefer to scrap the design and do a complete custom design that suits them. I see people all the time trying to sell the the "lot with plans" and rarely does it get sold and built that way. Spec house builders are good at this because they can and will deliver the final house design for a set price, probably something you might be challenged to achieve.
James Petty above is right. Subordinate the land to a construction loan and try to convince the bank that you can be trusted to carry through. What you're proposing would require you to first sell the buyer on the design, then convince him that you can get it built, then the two of you would have to convince a bank to make the loan. Too many balls to try to juggle on your first venture.
I have agreement LAND For Sale Southern California 43 Acres
Cool. will you take $4 canadian dollars? That two toonies! Think about those poor polar bears. They need a new home.
Not here for jokes you not interested cool
was not a joke. I see you're willing to negotiate. Will you take a crisp $5 bill then?