Interesting Offer
A retired developer has approached me with an interesting offer. He would finance the design and approval process for a 150 unit townhouse project to be built on my land. He would also provide a buyer at
the end of the process. His cut would be 1/3 of the difference between the value of the land now and the value of the land at the end of the approval process. What questions do I need to ask ? Any advice greatly appreciated
Sorry for the delayed response ..
Be sure to address how the development costs would affect the profit split. The split should be based on final profits, rather than the property value. Otherwise, it could be very easy to watch your 2/3 of the value get eaten away by the costs, while his 1/3 is clean money-in-his-pocket.
2¢
This is another time to remember the rule is, always consult with an experienced real estate attorney for commercial deals... always!