Hello BP community,
I am currently in a position where I will be partnering up with a couple contractors to start developing mid grade modulars with a price point of roughly $300 k list price. We found a street we want to start our venture on. Offer has been accepted already way below asking price, for one of the partners to start developing their own home on one of the lots. There are roughly 4-6 more lots we would like to develop on. Talking with a friend who has a large amount of real estate knowledge in larger development transactions, He mentioned I would be foolish not to pursue a rolling lot option. I brought up my concern about the market suddenly catching wind of this hidden gem and buying up the remainder of the lots or the seller raising his prices. Few questions:
Does anyone out there have a good recommendation for some consulting work from an experienced investor with these type of contracts?
Does anyone know the average price paid for consideration? I understand generally the option is usually 90-110% of asking price just wondering what is paid during the option period.
Is there an average time frame? If one house takes 4-5months to develop , how long should we give ourselves the option to buy?
I really appreciate any help you guys could give me.
You can do an option period for say 6-12 mo.s, with a set renewal fee for another 6-12 months. You may have to preset an increase in the purchase price also, for extensions.
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