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Developer wants to take my house.

Discussion in 'Real Estate Investing' started by Nelow, Sep 25, 2018.

Im going to Fight it. What do you think?

  1. Yes

    4 vote(s)
    44.4%
  2. No

    5 vote(s)
    55.6%
  1. Nelow
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    Nelow Contributor Read Millionaire Fastlane

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    Earlier this year my city sent my family a letter that they want to take my 3plex apartment away because it was not in use. In turn they will give it to a holding company that would then turn it over to a big developer interested in the block the house is in. He has already bought 80% of the block and now coming for the rest.

    This apartment is a large project that we were saving up for fixing. The building is also fully paid no debt but they city wants to claim it for free. Has anyone ever had a similar situation with any of their property?
     
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  2. Red
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    Red Nigerian Lottery Prince Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass Summit Attendee

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    Most people's knee-jerk reaction to something like this is "Fight them off! They can't do this to you!" but you can really work this out in your favor, in my opinion. A private developer wants the land and they typically have deep pockets. Just work out a deal where you come out ahead.

    Are there other 3-plex's in the area that are ready to rent out or currently rented? Perhaps in better shape? Tell them you want one of them for your property -like for like. You get an asset that's currently more valuable & actually performing for you in lieu of one that's not. Then maybe ask for your property taxes to be paid for the first few years on it.

    I don't know, it sounds like this might be a good opportunity to really upgrade to a performing asset with nothing out of pocket & very little effort. I would be very excited if I was in your position.
     
  3. Nelow
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    Nelow Contributor Read Millionaire Fastlane

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    Thanks for the replay @Red

    That is what i'm hearing from most people to sell, but before this developer showed up i saw the potential in the area and its only up from here. There are only 2 multifamily buildings on the block and including mines. All his building are zoned as single due to the extended vacancy.

    The developer does have "deep pockets" as i learn from a conversation he held with my neighbor in which he offered my neighbor who's house is well on the way to use and occupancy a pretty crap offer on his home.
     
  4. ChrisV
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    ChrisV Gold Contributor Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

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    Definitely talk to a lawyer

    I would say ‘fight it’ let him raise his offer then cave later

    act like you don’t want to sell just to get him to boost his number

    but talk to a lawyer lol

    I’ll never forgive myself if my advice costs you a shitton of money
     
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  5. Real Deal Denver
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    Real Deal Denver Gold Contributor Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

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    I deal with situations like this all the time. I'm an appraiser. IF the city NEEDS your property, they can force you to sell it to them. Under no circumstances is anyone going to take it from you for free just because they want it. The process of the city buying your property is called eminent domain. If they did not have this power, progress would be very difficult because some people would not sell for any price, and other people would sell for an extremely unreasonable price. Nothing would get done. No new roads - no expansion of business zones, etc. So eminent domain is a necessary tool to enable progress and growth in cities.

    Now IF the city did decide they were going to buy your property, a very detailed appraisal would be performed to determine its value. You would not have to pay for any of that, unless you contest their findings and had your own appraisal done to refute it. After the value was determined, the city is VERY generous in giving you more than the value in order to compensate you for your time and trouble.

    Lots of people LOVE selling their property under these circumstances. There is nothing to worry about. You will be treated extremely fairly, and if you are not, there are channels to appeal through.

    Aside from eminent domain, no individual or company is able to force anyone to sell their property. If it's vacant and in disrepair, yes, the city can force you to repair or clean up the property. But sell if you don't want to? No. Someone can make all the crap offers they want to. If you, or your neighbor, don't like it, then that's the end of that. You're in charge. You can sell IF you want to, and you will be the one that determines that price. End of story.
     
    Last edited: Sep 27, 2018
  6. Get Right
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    Lots of details missing here but this could be a great opportunity for you...right before it becomes a great nightmare.
     
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  7. DustinH
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    If it's eminent domain then the government has to pay you fair market value. So, you might want to fix it up a little before an appraiser gets there. I wouldn't pour much money into it, but make it look livable.

    Sell it. Move on. 1031 exchange it into a new property.
     
    Last edited: Sep 27, 2018
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  8. DustinH
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    What he said.
     
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  9. ChrisV
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    ChrisV Gold Contributor Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

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    Oh yea, I forgot about Eminent Domain laws.. he’s right. Fix it up to get the best market value.

    Just one clarification on this, I don’t think they have to give you market value, they just usually do. I’m pretty sure legally they can just take it. Look up the laws but it’s something to consider because if you fight them too hard I believe they can just say ‘well f--- you.. we’re just taking it.’ Again, this is not common, I’m just saying to research it because it’s been a while since I had to deal with anything related to Eminent Domain.

    Yea what he said... They’re almost definitely not going to take it, but I believe they reserve the legal right. Or at the very least they can lowball you. So don’t piss them off. You can really make out on this deal, and it might be best to just talk to someone with experience so you can get the best bang for your buck. It will be worth the money.
     
  10. Bryan James
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    I live near a hospital that keeps buying up houses on my street and letting med students live there. Haven't come for mine yet though. If they do I'll try and work out a deal in which I don't get screwed. Shouldn't be too much of a problem. I won't budge though if we can't come to a reasonable agreement; I'll be like the old dude from Up.
     
  11. DustinH
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    If you're proactive and talk to a lawyer and get an appraisal then you will have the upper hand. If the buyers understand from the beginning that you're prepared for their offer then you will be in a good position. A lot of the people that handle these purchases assume you don't know anything and are not prepared to do a deal. Ask a realtor that you trust to recommend a real estate attorney and get the ball rolling. Maybe even contact the hospital before they contact you about doing a deal.

    The people that are obstinate and force the property sale to go to a local judge to determine sales price and when you have to vacate are the ones that get screwed.
     
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  12. DustinH
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    Nelow likes this.
  13. Real Deal Denver
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    Let em try.

    A lawyer will eat em alive. This is what attorneys do. The difference between a great white shark and an attorney is that the attorney doesn't eat the bones.

    I'll help him by being an expert witness. We're all going to make a ton of money if this would get drawn out, and the city will pay all the legal expenses when they lose. If they were foolish enough to go up against an experienced appraiser, and an experienced attorney in something like this - they wouldn't have a prayer. I've been in this for 20 years. I know the game.
     
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  14. Pete799p
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    All depends on the situation but agree with others this could be great. Could be a situation where the sum of the parts are worth more then individually in which case you could walk away with an above market deal without having to go through the issues with consolidation or take on construction risk.
     
  15. Areding
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    Areding New Contributor

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    If you offered a normal price for the apartment, I do not understand why are you worried. You won’t lose anything for no reason. Just think how to get the most out of this situation.
     
  16. Nelow
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    Nelow Contributor Read Millionaire Fastlane

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    Update:
    Thanks everyone for your input and opinions. As stated In the poll, I fought it. The result?
    I worked out a deal with the city to rehabilitate the house in 6 months time. They agreed and I started work as soon as my permits approved.

    (6 months) time to renovate a fire damaged 3-plex is no small task, but It will be done. This was the first house my family bought to change our future and I will work like hell to see it through. I recently sent in a progress reports to the city and they approved. So work is moving forward, If anyone is interested in before and afters here are a few of the images I submitted.

    [​IMG]
    [​IMG]
    [​IMG]

    [​IMG]
    [​IMG]
    [​IMG]
     
    Last edited: Nov 1, 2018

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