Property Development Opportunity
Discussion
I'll keep this as brief and to the point as possible but would be grateful for any views.
My very elderly next door neighbour lives in a bungalow on a VERY outsized plot but in a very desirable and well off superb of a thriving city: Bristol. By outsized I mean relative not only to the property (which occupies about a third of the space) but also to all other plots in the area. I've always said to the OH "you could knock that down and put three of ours on there!". The sprawling gardens are just old rabbit hutches and endless rose bushes...
Anyway, she's obviously gone into care or something as an endless stream of suited guys with clipboards have been prowling around the property for the last few days and the family have been around a lot more. OH has overheard similar conversations to my own above!
So, am I mad to think that I could do something here or am I uniquely placed to get in early on a cracking opportunity? I don't have any experience of building (but do have good contacts) and I work full time in investments. I don't have loads of spare capital but am not afraid of leverage; nothing ventured nothing gained etc
There's quite a few local examples I have noticed where people have done similar and I assume local planning are sympathetic to projects that boost housing supply/utilise land effectively? Can a first-timer secure financing for such ventures? What steps would you take from here?
Can you raise the capital to purchase the property + land for it current market value (ignoring any development upside)? Your problem will be other experienced buyers prepared to acquire the site without planning now and take a risk on securing planning later.
Beyond this you'd need find an architect sort out planning permission, appoint a builder or builders and if you've not done it before a project manager. Planning wise I'd say 6 months to a year to reach an approved plans stage if you are starting from first principles, end to end around 36 months until as a minimum until you'll see all your money back? Can you secure finance for this length of time covering purchase, planning and development costs + a contingency?
Beyond this you'd need find an architect sort out planning permission, appoint a builder or builders and if you've not done it before a project manager. Planning wise I'd say 6 months to a year to reach an approved plans stage if you are starting from first principles, end to end around 36 months until as a minimum until you'll see all your money back? Can you secure finance for this length of time covering purchase, planning and development costs + a contingency?
I'm a town planner based in Bristol. We work with lots of guys who would buy a site 'subject to planning' or do a jv. That's probably your easiest route, if you can get a position.
However, these guys have relationships with agents, and I doubt the agents have missed the development opportunity.
However, these guys have relationships with agents, and I doubt the agents have missed the development opportunity.
Edited by covmutley on Tuesday 10th March 21:24
I imagine your first stumbling block is going to be who the people with clipboards are - if they are who I would guess they are then you've probably missed the early opportunity and will find the property in the next lot of auctions.
Could you speak to the family and find out what they would want for it?
Could you speak to the family and find out what they would want for it?
You'll have a load of small fish one man band developers fighting over that.
If you can convince the family to sell it on with an overage position so you retain some of the upside thats what i would do.
either that or fund the planning and sell with that its the best option.
f
k building it out yourself.
If you can convince the family to sell it on with an overage position so you retain some of the upside thats what i would do.
either that or fund the planning and sell with that its the best option.
f
k building it out yourself. You'll find it very difficult to beat the pro's and get your hands on the plot if it has already gone to agents for marketing etc. They'll know all about it and will be waiting for the day when they can buy/sell it.
Try and differentiate yourself - Offer to buy the house (cash - worry about financing later), as you'd quite like to extend your own home and add more land to suit a growing family etc. You may in the future move your mother in to the bungalow once you've done it up to keep her close by.
Executors/Old People very often choose to sell their homes to people who they think are going to live in it rather than use it to make a profit. It happens fairly often that lower offers are accepted on the basis the property goes to a family, not a greedy developer.
Of course, morally questionable.
Try and differentiate yourself - Offer to buy the house (cash - worry about financing later), as you'd quite like to extend your own home and add more land to suit a growing family etc. You may in the future move your mother in to the bungalow once you've done it up to keep her close by.
Executors/Old People very often choose to sell their homes to people who they think are going to live in it rather than use it to make a profit. It happens fairly often that lower offers are accepted on the basis the property goes to a family, not a greedy developer.
Of course, morally questionable.
FrankAbagnale said:
Executors/Old People very often choose to sell their homes to people who they think are going to live in it rather than use it to make a profit. It happens fairly often that lower offers are accepted on the basis the property goes to a family, not a greedy developer.
You'll probably turn out to have a lot of experience in this area but from the probate sales I've seen the family seem to hang for the last penny, rather than just getting shut quickly.One we were "directly" involved in, an old bloke we helped look after who was taken into care and then immediately died - we had several calls from people interested and we were anxious that nothing would be done to upset the neighbours who had been extremely helpful over the years.
The family, OTOH, had the house cleared and on market before he was in the ground. House had been untouched for 50yrs and needed total refurb. EA held an open day which was apparently mayhem as so many people turned up. It went immediately to a local builder for full asking price - way more than I expected and only slightly lower than similar ready-to-move-into property sitting on the market.
Sheepshanks said:
You'll probably turn out to have a lot of experience in this area but from the probate sales I've seen the family seem to hang for the last penny, rather than just getting shut quickly.
One we were "directly" involved in, an old bloke we helped look after who was taken into care and then immediately died - we had several calls from people interested and we were anxious that nothing would be done to upset the neighbours who had been extremely helpful over the years.
The family, OTOH, had the house cleared and on market before he was in the ground. House had been untouched for 50yrs and needed total refurb. EA held an open day which was apparently mayhem as so many people turned up. It went immediately to a local builder for full asking price - way more than I expected and only slightly lower than similar ready-to-move-into property sitting on the market.
It really does depend on individual circumstance, and you could be spot on that they go for every penny possible.One we were "directly" involved in, an old bloke we helped look after who was taken into care and then immediately died - we had several calls from people interested and we were anxious that nothing would be done to upset the neighbours who had been extremely helpful over the years.
The family, OTOH, had the house cleared and on market before he was in the ground. House had been untouched for 50yrs and needed total refurb. EA held an open day which was apparently mayhem as so many people turned up. It went immediately to a local builder for full asking price - way more than I expected and only slightly lower than similar ready-to-move-into property sitting on the market.
If if is the case where the old boy/family go for money over sentiment, I would imagine an experienced developer with deep pockets who builds at a low £psf will bid well in excess of the OP.
Whatever happens, put your best foot forward and if you lose then it will be on the basis that someone paid more than you were happy/willing/able to pay anyway.
Personal opinion is that I think the chances of the family being interested in uplift deals/JV deals is the least likely possibility and wouldn't put forward an offer on this basis. Keep your offer simple.
Edited by FrankAbagnale on Wednesday 11th March 11:49
Depending on how large the OPs own plot is he should be considering putting his on the market as well. It might be that with the additional property one can get an extra unit or two on the land and therefore those buying next door will be willing to buy his as well and pay a higher value for it than as a standalone dwelling.
It will also avoid him having to live next to a building site, be concerned about whats being built next door etc.
It will also avoid him having to live next to a building site, be concerned about whats being built next door etc.
Chrisgr31 said:
Depending on how large the OPs own plot is he should be considering putting his on the market as well. It might be that with the additional property one can get an extra unit or two on the land and therefore those buying next door will be willing to buy his as well and pay a higher value for it than as a standalone dwelling.
It will also avoid him having to live next to a building site, be concerned about whats being built next door etc.
Do this - speak to the agents and say you'll be interested in selling as wellIt will also avoid him having to live next to a building site, be concerned about whats being built next door etc.
Kudos said:
Chrisgr31 said:
Depending on how large the OPs own plot is he should be considering putting his on the market as well. It might be that with the additional property one can get an extra unit or two on the land and therefore those buying next door will be willing to buy his as well and pay a higher value for it than as a standalone dwelling.
It will also avoid him having to live next to a building site, be concerned about whats being built next door etc.
Do this - speak to the agents and say you'll be interested in selling as wellIt will also avoid him having to live next to a building site, be concerned about whats being built next door etc.
But appreciate the suggestion and all the other advice given.
I'm hoping to speak with the daughter early next week.
have you been a good neighbour? tell the daughter you apprecaite that development will happen, but that you want to ensure it happens in a way that wont impact your property and and ask her for first refusal. The faimily wont lose out financially and you could use the goodwill as your leverage to get the site.
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