Opportunity or waste of time?

[YoungPharmD20]

Long story short my aunt has a piece of property that is right next to campus - like the fence over - and the university offered 40k when her asking price was 40k for each lot(being two lots connected), so 80k.
Now my question is can i buy this empty property and increase the value to make it more desirable to the university in anyway? Or i can ask that she gets her 80k(maybe i can negotiate to 75k) and i sell it for say 100k i keep the difference?

Main question: Despite the proximity to the university -and its newly growing(the first semester just ended 2 weeks ago)- is it possible to create enough value on it so that i become profitable? Its not that big though, probably like half an acre combined, roughly.

 

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[YoungPharmD20]

Its in the middle of the school and the dorms, fwiw

 

[Almantas]

Its in the middle of the school and the dorms, fwiw

It looks the guys are in a desperate need of those 2 lots. This indicates that those 2 lots will potentially cost a lot more down the line. If I were you I would (as you mentioned) negotiate the price of those properties with your aunt (I know sounds sneaky, but hey this is business) and increase the price to at least 100k or alternatively consider to throw it into auction with a reserve price 90k lets say and see what offers come up

 

[YoungPharmD20]

It looks the guys are in a desperate need of those 2 lots. This indicates that those 2 lots will potentially cost a lot more down the line.

Eventually, but i dont have control over whether it does or not and at what rate. So i was wondering if theres anything within my control that i can do to increase the valuable and/or make it more desirable

 

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[Almantas]

Eventually, but i dont have control over whether it does or not and at what rate. So i was wondering if theres anything within my control that i can do to increase the valuable and/or make it more desirable

Clean it up if it's in a messed up condition and buy cheap sell high. You can secure a conditional offer with a potential buyer with his/her signature and then negotiate the price down with your aunt. Once she agrees to sell it for example for 75k close the deal and re-invest profits. This is just my personal thought though.

 

[YoungPharmD20]

Is there anything I can add that will add value? like a nice slab of concrete considering that its inches away from the parking lot. Or would that devalue it? Are there better things I can add?

 

[BigBrianC]

Throw up a coffee shop & parking lot. Sell permanent parking spaces

 

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[jon.a]

How is taking advantage of family an acceptable option?

 

[YoungPharmD20]

How is taking advantage of family an acceptable option?

If everyone is happy and agreeable to the terms then i dont see what the problem is. Its like selling your xbox to your cousin for a couple bucks less.

 

[Ecom man]

If everyone is happy and agreeable to the terms then i dont see what the problem is. Its like selling your xbox to your cousin for a couple bucks less.

You are not talking a couple bucks. You are talking from 80k to 100k. If your aunt found out that you made 20k that should have been hers do you really think she would be happy with the situation? I agree with Jon.a taking advantage of family is not an acceptable option.

 

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[YoungPharmD20]

You are not talking a couple bucks. You are talking from 80k to 100k. If your aunt found out that you made 20k that should have been hers do you really think she would be happy with the situation? I agree with Jon.a taking advantage of family is not an acceptable option.

Im afraid youre not understanding... im buying it at or near her asking price, the extra cash coming from the buyer will be a result of me putting in some work to increase the value.

 

[YoungPharmD20]

I came for suggestions, not to get befuddled by a middle-class morality,what is this? courtesy class?

 

[Donovon]

Instead of trying to negotiate your aunt down and squeeze money out of her, why not try an alternative win-win situation? Hey auntie, I'll help you negotiate an additional $20,000 in your land deal if I can keep $19,000. You still make a good amount of money and she gets something extra out of it. Or even just ask if you can fix things up and keep all the price increase for yourself, if she's a decent person I don't see why she'd be against it.

Ultimately it's up to you but it seems like a win-win is possible, no need to turn it into a win-lose by trying to drop the price. It's not some weak-minded morality, it's just good business. Anyway, no one can really answer your question besides you. We only have a handful of details, though it sounds like you have a good negotiating position with the university. If they really need it you can leverage that in your favor. Best of luck to you.

 

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[YoungPharmD20]

BigBrianC is the only person who has answered the question, cmon i didnt ask for advice on negotiating i asked on increasing value on an empty lot

 

[biophase]

Don't waste money trying to improve it.

You can tell your aunt that you will try to get her more money for it than $80k. Tie it up by putting it under an assignable contract for say $90k for 30-60 days. Then go shop it around and see if you can get $100k for it. If you do, the buyer basically will give you $10k for the piece of paper and then use your contract to buy the property from your aunt at $90k.

I'm guessing that there is some investor that wouldn't mind sitting on this property for a few years after paying $80k-$90k for it and then selling it to the University for way more.

 

[IGP]

Assuming it is zoned correctly and you're not broke. Buy it from her, build something of value either a rental property or hot dog stand etc.

In that location, it sounds ideal for a coin laundry mat. Which if done right can be relatively hands off. You could run it yourself or rent the property out.

Not sure why your only option is to sell to the University. If it was me, that would be my last option.

 

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[jon.a]

BigBrianC is the only person who has answered the question, cmon i didnt ask for advice on negotiating i asked on increasing value on an empty lot

There's no reason to do anything to the lot other than keep it clean. If the university buys it, they'll remove everything on the land anyway.

 

[Pete799p]

There's no reason to do anything to the lot other than keep it clean. If the university buys it, they'll remove everything on the land anyway.

100% Agree. In fact building something might actually devalue it. Adding a slab of concrete that does not meet their specs would simply cost more for them to demo. The thing you need to understand is what do they want to do with it. Do they have a project that they need that land for or are they just buying because its good business.

Often times you will see institutions/large businesses that occupy urban infill locations buying up land around them not because they actually have an immediate need but because its good business. If they ever want to expand down the line it's a lot easier and cheaper to purchase it now, sit on it, and control it then hope they can buy it down the road when they might need it.

Understanding what they can/ could/ or would build there might help you understand the value that they are willing to pay for it. If it's the key stone for a major project it has potential to garner an outrageous value but if not they will most likely have a ceiling on what they are willing to pay. Note that this process, especially when negotiating with a bureaucratic organization, will most likely take a whole lot longer then a few months and they could end up going radio silent on you as well.

If you want to make some money off of this I agree with others that you should propose a profit sharing scenario with your aunt ( I do not know your relationship with your Aunt/family). First of all it is the right thing to do and second of all if you do every decide to forge a path in real estate the first thing you will learn is that it is a relationship business and much like the fastlane is a rather tight knit community. Word will spread fast if you are not a good person to do business with and those who can create win win situations often profit the most. It's important to take the long view and if you can really deliver that kind of value it could be the start of a track record that could allow you get started which can be worth a whole lot more then a few thousand.

Note this does not mean always paying the highest price, it means solving their problems. If your aunt really wants to just sell it and be done with it and after talking with her about she says that she doesn't care about the extra money ( which happens more then you would think) then figure out if it is really worth more then what she is asking and find away to buy it.