Wholesaling a multi-million dollar deal

[Dominic Panicucci]

BP Community,

I recently noticed a 1/4 developed property, in the suburbs of Denver, that caught my eye. I drive past this property almost every day.

There are currently 2 separate multi family/townhouse buildings with 13 units filled with tenants. The rest of the property has all the utilities (water, power, gas, phone, sewer) in place, a road and driveways in place, and everything is close to final grade, from the development side.

Viewing data on the county website, there is potential to erect 6 more buildings with 40 more units on this property. There are no current liens on the property, that I have found. Not sure why they stopped building.

I spoke with my developer/general contractor giving me an average cost $50.00 per square foot. The average sqft is 1434 x 40 = 2.868 million. The average price per unit is just over $304,000. Looking at these numbers, means there could be 5 million on the table. Depending on sale price, and a bunch of other factors.

I’m curious on how to write the contract for the current owner of the property. What would be a fair and enticing offer in a perfect world. How to go about the current hoa, building plans, current homes on site, (that are being rented out). The entity that bought the property paid just over 2 million, 10 years ago, for the 3 acre lot. If I need an attorney to write everything up. Or if I should find investors to go in on the deal together, rather than wholesaling.

Thanks for the advice,

D. Panicucci

[Kyle Doney]

Step 1 is talking with the owner and seeing if he has interest in selling the property. Have you done this? 

If so, did find out the situation and what the owner is looking for on price/ terms? Lots of variables on this one, no one will be able to give you an idea of an enticing offer without much more details. 

Building is much more than $50/ sq ft in Denver.