Seeking feedback on what third parties I should consult with and any experience this group may be able to offer. My husband and I invested in 4 acres and a bungalow house (residential property) in the downturn off a main road in an area that is building up commercially (suburb, but main throughway). We border a corner lot which has a grandfathered in business up for sale; on our other side is a dilapidated house that also sits on acreage and has nice frontage. Our property is currently rented with good tenants (nothing is forever). The 2 adjacent property owners are motivated to sell (into retirement years) and have been trying to do this for some time. I personally wanted to sit on the property until approached from an investor with a good offer and/or until the property reached a higher market value. I saw this as a longer term investment. While the area is growing, there are still other properties in the area for sale (not sure the particular factors for not selling). Across from us is a large retirement complex that has expanded to its limits.
Before the downturn (and before our ownership), there was a deal in the works to have our property and adjacent ones developed for condominiums. It fell through with the recession and we later ended up buying the property from the bank. It is suitable for retirement community or such.
recently, the realtor listing the corner business, and a lawyer, approached my husband and all adjacent lot owners proposing collaboration on a deal to approach the township for commercial zoning. I have yet to call the realtor to hear out the details of his proposal directly. Per my husband, he is proposing that our property is worth the amount we'd like to turn and also that everyone in the group (if it zoned and we had a buyer) would receive an equal/ flat distribution per acre owned. There are pros and cons of each lot, including ours(which is right in the middle and doesn't have access from the crossroad).
All property owners are onboard except us. I should hear the realtor out (as an early step); I just would like to be a bit more researched before I engage. My initial thoughts: 1) what would be the benefit of having one realtor - how would we ensure our interests are met vs seeking our own representation 2) what is the proposed level of flexibility we'd agree too if our bottom-line isn't met 3) why wouldn't we wait until a motivated investor approached us with a deal contingent on commercial zoning approval vs turning our property proactively commercial (I know this makes it more attractive- but we also aren't needing to sell right now 4) what benchmark information does the realtor have on the market value (can ask this question of course)
A positive consideration is the appearance of owner collaboration- something that would be necessary if an investor was interested. To me, for the right price, they will consider selling in the future anyways; they've now all shown interest. I feel that the 2 adjacent owners want to cash out now for the best price they can, not necessarily sit on it for the best timing. They want to move on.
I appreciate any advice on next steps, recommended expert or research I should engage, or considerations we should look out for.
@Deitra Curry My first reaction would be to tell you that by rezoning a property from residential to commercial typically significantly increases the property’s value overnight. I’ve seen it increase by 10x.
Experience tells me that this attorney is representing a Clint that is attempting “land assembly” for the purpose of merging the lots into a much larger development.
Is the attorney wanting to represent you and the others for the purpose of rezoning? My advice would be to rezone the land on your own. Don’t let someone else buy your property, rezone it and make a killing.
Thank you very much. I will confirm if this, a land assembly, is what they are proposing. I wasn't sure if this arrangement was an original idea or something that I could better research - a recognized approach. Appreciate your recommendation on the rezoning as well.