how to structure commercial and residential project with two prin

[John Chapman]

I'm working with a land owner.  I want to develop a small commercial building on the ground floor and put apartments on the second and third floor of the land that he owns.   The landowner doesn't have a real estate background and doesn't want to take out a loan to help with the building costs.  The landowner would like some equity interest in the project however.  He owns the land free and clear.  I'm most interested in the apartments, but I cant give him all the commercial because the costs to develop the commercial building would be more than the land value that he is donating.  Who has some ideas that can help me structure a deal that meets both of our needs.  Thanks!

[Charlie McCurry]

@John Chapman this sounds like a good mixed-use project.  Your prospective land-owner partner can contribute the value of the land to the project and then let you manage the development process.  But the key is for the two of you to agree on what that land contribution value is.  If you can't agree, I suggest hiring an appraiser to appraise the land if you and your partner agree beforehand to accept whatever value the appraiser determines.  With that information in hand, I strongly recommend hiring a competent real estate/business attorney to set up a partnership agreement which clearly designates responsibilities between you and your partner.