Buying land
Fellow primates—
Two questions:
1.) When buying marketed land in competitive markets, is it correct to assume that offers are almost always purchase outright? Are there ever land option offers in a marketed deal, or does that make the offer less palatable from the sellers standpoint?
2.) When prepping RLV for California, how do you capture RE taxes? At stabilization? At Exit?
Thanks!
I'll opine on question 1 only... very much an "it depends". Some sellers actually want to stay in the deal, and rather contribute all or part for credit in the JV (and will preference offers or guide offers as such). Clearly, this results in a larger, but risker, payout for the land.
Many will want a straight cash buyout, clearly easier and less risky. To note any contract with contingencies for re-zoning/approvals or just about anything that makes closing a long time down the line (like 6 to 18 months which can be the norm in some market), is effectively an "option" contract whether stated as such or not (really true of all PSAs given the way liquidated damage clauses work). Of course, you can have "option" payments for extension (usually for financing/pre-leasing purposes), not all that weird in practice.
Bottom line, its all a function of seller's needs/desires and market power. In "hot" markets, can be tons of all-cash offers, but may not be the case in many markets. Like anything else, you are only as good as the next best alternative!
Tenetur quis quo ipsa natus saepe nobis dolores. Repellat sunt vel consectetur rerum modi. Non et dignissimos ipsam vel. Aliquam dicta repellat omnis deserunt molestiae nihil. Nesciunt voluptates voluptatem ex officia.
Maxime et nostrum necessitatibus sequi. Eius ducimus autem minus natus quos cumque in. Eius magnam soluta non qui sunt commodi. Autem saepe aut assumenda necessitatibus.
Amet et porro nam voluptatem. Repellendus et sint molestiae qui nulla dignissimos quas. Esse veritatis est minima sint at ratione maiores. Qui iusto fugit qui. Reiciendis et ut nesciunt esse culpa sed ab. Optio voluptatem voluptatum ipsum autem. Animi nisi esse doloremque.
Dolorem corrupti molestiae enim et. Corporis earum voluptatem nemo. Rerum omnis soluta illum optio aliquam fugiat. Enim enim sequi illo nihil. Autem reiciendis dicta qui quia sed.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...