All Forum Posts by: Ivan Leung

Hi,

We would like to get educated on how land developers work.  We own a piece of land and a developer is interested in development.  If we want to hold the property for income (land lease) when the parcel is developed, how does the developer get paid?  How does this work?  What are the steps for the developers?  The prospective developer has gas stations and fast food companies who are interested in the parcel.  We don't want to sell our interests, we would like it for income.

Thank you for any and all input.

Hi Michael,

Thanks so much for your input.  We mainly are looking to develop just a portion to be RV/boat storage with overhang, water and electric.   We are calling all the surrounding facilities and they are always full.  I agree with you about the space holder land.

Danny,

Thank you so much for your input.  I will keep all of your great advice in mind.

Hi all,

This is a great forum and very informative answers to our inquiries.  Here is another:  we have an opportunity to acquire a piece of land, approx. 7 acres, and is zoned light industrial and has a conceptual site plan to develop a 100K ft self storage facility.  The city has given an informal "nod" to the site but it has not been formally approved.  Surrounding this location is all light industrial warehouses near the exit ramp of the major interstate.  In less than a mile away, a housing development that is set to build 10,000 houses and within 3 miles, they are set to build 20,000 homes in the next year.  A few self storage facilities are already there and are always full.  But are much smaller facilities and do not have the capacity for RV and boat storage.  Our idea is to acquire the land and start developing our vision for this in separate stages.  We own a few warehouses now and we have experience in this.  My question is how profitable is it to use some of the development for RV and boat storage as opposed to self storage.  We are located in S. Florida.  What is a typical price per square foot to develop self storage.  If we are approved for 100K sq ft facility, how should we undertake the phase development on this?  Is it a smart option to partner with PODS or another big storage company to lease the land?  What do we need to watch out for?  Thanks for any and all input.

Thanks Ronald and Taylor for the helpful input.   I will be getting documentation stating the cleanup occurred doing phase 1 and phase 2 environmental.  Anyone have any experience developing that small of a site (0.42)?  Or is it just too small for a busy corner?

Hi All,

I love reading the insights you have on this site.   Very helpful!  I am interested in purchasing a 0.42 acre property on a major intersection of a developing city on the I-95 ramp.  The opposite 2 corners have giant truck stops.  The other 2 corners are vacant land and I am looking at purchasing one of these corners.  Major traffic count, about 40,000 per day.  The county is planning on widening the road in the near future.  I'm thinking of putting a small fast food joint like Checkers, which doesn't require a large footprint.  I have a couple of questions and concerns.  I found out that in the 80's, that site contained a small gas station which had a contamination issue.  The broker told me that the EPA clean up program is in effect.  Has anyone dealt with this old gas station contamination issue in Florida?  Being that it is a small parcel, does anyone have any additional ideas as to what type of food place can sit on a small parcel such as this?    Subway is also across the street.  Thanks for any and all input.

Thanks, Dave, for very insightful input.  Good points being made and need to be considered.  Because the market is at a high point over the last few years and I'm not a real estate investor, but rather a speculator,  I can't envision any 1031 where I can make that kind of return.  In our area, $1.2 doesn't get you much.  Right now, I am getting a good return on the investment and the market is too unpredictable for the 5 year future.  So I guess I am taking the gamble.

Thanks for all the input and advice. I would like to give some further details so that I can make a decision. The building I bought 3.5 years ago, I purchased for $650,000. Since then, the market has rallied. We put it for sale for $1.2 million. The lease is $120,000 NNN. When we put in the market 6 months ago, there was no action. No one made an offer. Now, we got this offer and the prospective client is willing to lease for 5 years, 3% increase yearly starting year 2 and also an option to buy at end of 5 years for $1.5 million. We feel the market is very hot but by next year or so, it may level off. The buyer is willing to give us a full price offer of $1.2 (our asking price now). Meanwhile, if we take the sales offer, we have to do a 1031 exchange right now. The building is free and clear so bottom line.... should we take the money and run? Or sit on it and collect the income and hope market continues and they buyout at the end of 5 years?

Thanks so much!

We purchased a warehouse building 3 years ago for our use.  Because our business expanded, we moved to a bigger location.  We decided to put our smaller warehouse for sale or lease.  Whichever was the better deal or came first, we were going to take it.  After the property sat for 6 months, we got a quite a few showings for lease.  Finally, last week we got a company interested in our property and they offer us either they can buy it outright or lease for 5 years with an option to buy.  The interested company already owns another building a block away from ours and needs extra space.  They are a subsidiary of Berkshire Hathaway.  The term is 5 yr with a 3% increase from year 2 on with a buyout at 5 years with another 5 year option to rent if they do not exercise the option or return the building.  Should I sell the property now or lease to them and take the chance that they will not exercise the option at the end of 5 years?

thanks for any input.

I'm new to this site and need some advice.  I just entered into a contract to buy property that is zoned Agricultural but it is adjacent to I-95 onramp.  County is known as a "slo-gro" and is hesitant to change the zoning to commercial.  I am thinking this location is great for gas station, truck stop, travel center, hotel, etc.  We would like some advice on moving toward GC zoning.  Thanks!