Seller Financed Development

[Jessica S.]

Hi there,

We have an interesting scenario. 

A seller owns a lakefront home(3,000 sq ft) property which has a value of $2.8 million. They don’t wish to sell it outright because their end goal is tocontinue living on the waterfront, but downsize to 2,000 sqft and have $1 million in the bank.

The entire property is subdividable definitely for 2 but maybe for 3 depending on some land use adjustments. 

They don’t have the money to do the short plat process but would like to find a developer who is interested in this creative scenario where in the end they have a smaller lakefront house and $1million. 

The shortplat process could take about 1 year + $50k in consultant research. 

How on earth would someone structure something like this? Clearly there is value in the deal but how would it work?

(I forgot to mention, their current house would have to eventually be demoed in a 2 or 3 house scenario because it sits dead in the middle and they would have to move away for a year while everything was happening).