$500K Land, $2mil House - How To Make A Deal?
I would like to build between 3,500sf - 5,000sf custom home near buy Hudson River (Yonkers, NY)/ Lot will be 9,000sf, $500,000 peace of steep land. Upon completion the house should be sold and profit placed in hands off charitable organization. The mentioned land is the last parcel in that aria where you cant buy a house even if you want. people don't sell and when they do, they want arm and leg. The lot sets empty for a long time but the owner might be motivated to sell it now. No, it is not listed on MLS.
The FMV for the custom house built should be about 2 plus mill. How should I structure my deal for the land without having to pay for it until I sell the improvement, but still be able to secure the full construction loan to build the house from the savings & loans or a bank?
Should I lease option the lend for let say 3 years with an option to pay the balance in 1 lump sum, balloon payment at any time but not latter then lets say in 3 years with one 1 year extensions to make the owner happy with less demands? I would like to secure the land with a low down initial payment then pay the seller out of the closing escrow when I sell it, which might happen in couple of years or more but definitely in time when I am ready to close with my buyer. My buyer would need to gets the house and the land in the same time. Except on Manhattan, over here no one likes to buy the home on a land lease.
I heard of another way beside the lease option to buy. it's called subordination clause located on the deed but what if the seller wont subordinate the first position to the bank? Should I stick to short term lease option until the escrow close? Is that good enough deal for the bank to land me the money? I heard of above mentioned options but I never executed one. What paperwork would you use? Need detailed instructions. Thank in advance!
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