Land purchase funding
Discussion
Slightly home related, but predominately finance related as due to funding a land purchase.
The opportunity to buy a plot of land has come up which has planning permission for 6 properties. 3 would be barn conversion, 3 would be new builds. Even with planning, the cost of the land is roughly £500k, which is about £83k a plot which is good value for the area and plot size.
I'd love to be able to do one of the barn of the conversion for myself to live in, and could happily afford one plot and mortgage the build, however, the vendor understandably wants to sell the land as a whole rather than separate transactions. That being said, the vendor is willing to work with me in the sense that they have been offered the asking price by a larger property developer, but would prefer to sell to local residents for self-build purposes if the asking price is matched as the seller is also local resident himself.
I simply do not have the capital to buy the whole plot so I'm trying to explore all my options. I've been given 30 days to match the price, or at least be in a position where it's a realism, or the land will be sold to a developer.
The least risk free would be to form a consortium of sorts with 5 other like-minded people and simply pay our given shares (although I imagine the legal work would be a mess as an access road needs to be built at a cost to all 6 plots, as well as bringing utilities off the main road and would be far more cost affective to do for all 6 at once). I have no idea how to approach this, especially considering the time frame.
Or the other option which is possibly the most realistic, is to look at taking out a bridging loan. I have enough for collateral, but this means all the risk then shifts onto me. I'd then look to provide the utilities and access road, take my plot, and then offer 5 fully serviced plots ready to go, with planning.
This project might well simply not be feasible, however, in 5 years of looking at buying some land to build a single house which isn't going to financial ruin me, nothing suitable has come along so I'll be dammed if I at least don't explore every option.
Any advice or help would greatly be appreciated.
The opportunity to buy a plot of land has come up which has planning permission for 6 properties. 3 would be barn conversion, 3 would be new builds. Even with planning, the cost of the land is roughly £500k, which is about £83k a plot which is good value for the area and plot size.
I'd love to be able to do one of the barn of the conversion for myself to live in, and could happily afford one plot and mortgage the build, however, the vendor understandably wants to sell the land as a whole rather than separate transactions. That being said, the vendor is willing to work with me in the sense that they have been offered the asking price by a larger property developer, but would prefer to sell to local residents for self-build purposes if the asking price is matched as the seller is also local resident himself.
I simply do not have the capital to buy the whole plot so I'm trying to explore all my options. I've been given 30 days to match the price, or at least be in a position where it's a realism, or the land will be sold to a developer.
The least risk free would be to form a consortium of sorts with 5 other like-minded people and simply pay our given shares (although I imagine the legal work would be a mess as an access road needs to be built at a cost to all 6 plots, as well as bringing utilities off the main road and would be far more cost affective to do for all 6 at once). I have no idea how to approach this, especially considering the time frame.
Or the other option which is possibly the most realistic, is to look at taking out a bridging loan. I have enough for collateral, but this means all the risk then shifts onto me. I'd then look to provide the utilities and access road, take my plot, and then offer 5 fully serviced plots ready to go, with planning.
This project might well simply not be feasible, however, in 5 years of looking at buying some land to build a single house which isn't going to financial ruin me, nothing suitable has come along so I'll be dammed if I at least don't explore every option.
Any advice or help would greatly be appreciated.
PHlL said:
Any advice or help would greatly be appreciated.
Run Forrest, run.As soon as you scrabble together enough cash to match the developer's offer the seller will go trotting back to the developer, who will offer more money and complete the purchase. If you can't afford to match and then out-bid the developer on your own, just walk away now. You'll save yourself a lot of pain.
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