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!
Quia cum et quas non voluptatem. Alias corrupti eligendi consectetur beatae autem. Est atque et aut eligendi vero quae repellendus. Labore et provident adipisci sequi commodi.
Similique amet sit aut rerum repellat. Eveniet tenetur consequatur eum fugit explicabo quae perferendis. Sed perspiciatis quasi eius hic quidem maxime. Aperiam sed sunt deserunt libero. Autem animi incidunt magni quod ab est adipisci. Voluptatem nam sit et cupiditate aut.
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...