I have a large chunk of land in North West Indiana. It is about 10 acres on a lake with 600+ feet of lakefront. There are 3 homes on 3 different parcels - the entire package is listed on one deed.
I have no mortgage on this property.
Recent reassesment of property taxes in the county have increased so much that I have fallen behind on the taxes. The taxes have increased from about $5,000/year to almost $20,000/year in the last 4 years!
I was approached by a Commercial Developer who made an offer to buy it. He initially offered $870,000. Then 30 days later he offered $1 million. His offer is well below what I believe it is worth. I believe it is worth about $5 million. Recent sales of similar properties on the lakefront - 2 acres for 1.4 million - are what I am using to arrive at my number.
I have no cash flow. I have tried to obtain financing on this land, but I have had no success. There are problems such as zoning, and ingress and egress.
How can I find the capital to pay the back taxes so that I can sell the property.
Sound like you may also need to get the property rezoned and also solve the ingress/egress problem. What is that problem exactly. Are you land locked or is it something simple like a better driveway?
If the property is worth $5 million I would too try to find the financing to pay the back taxes and cure the other problems. Hard money lenders may be your best bet. You may also consider a partnership with a developer where you get maybe a million up front and then a big percentage of the final sales price. Depending on the development this may even net you more than you originally expected.
The ingress/egress problem is this: The legal description of the driveway on the deed states that a 16 foot driveway follows the old Monon Railroad easement. The Railroad was gone before I was born (I’m 40). I can still find the old railroad bed, but the driveway takes a turn away from the railroad bed/easement. In fact, others have fenced off, and built on the old railroad bed, which is my easement. The driveway is over 300 yards long.
Originally, the land was zoned as multiple family residential. The Town rezoned the land as a park (effectively stopping me from starting any new construction). I believe that the town wants the land (it is the only undeveloped lakefront in the whole town), and they are doing what they can to stop me from developing, or even selling.
Tedjr, can you explain in some more detail what you mean by a partnership and a percentage of the final sales price?
As an example you and a developer form a partnership to develop the land. With the developers financial strength he may be able to borrow enough to pay you $1M cash and then give you a note for say $4M and then give you a percentage of the profit. If you built town-homes and put together $20M project you could make another $3M to $4M. Even if you had to put the land in at $4M you could make a great profit off the deal.
A lot of times a bird in the hand is better. You may have some legal problems as well with the easement. My Aunt had a similar problem and it cost her thousands to get it settled and she was a poor lady in a mobile home.