My dad has two friends who want to sell him some land.
Heres the details:
The 2 freinds each own a 25% undivided interest in a 617 acre tract in terrell county texas (going rate for land is about $350-$400 in this area)
-obviously, there are two other owners, not a big deal
-the two guys who my dad knows want to sell their 25% ownership to him, so my dad would own 50% and the other two owners would still be at 25% each.
The entire 627 acres is appraised at about $86,000 on terrell county AD, so each respective 25% portion of the ownership is worth about $21,500 or something like that.
Now, the 2 friends of my dad want to sell him their portion for a total of $80,000. There are two small hunting cabins on the land and they claim that the cabins, along with some feeders for hunting are why they are asking so much. My thoughts were that the asking price should be somewhere closer to $46,000 or so bc the cabins dont show up on terrell AD as improvements…they just show the land as raw pasture.
Is the $80000 for the 50% owner ship of the land a good deal? I dont think it is, but im not that familiar with partial ownerships and what not.
Im not questioning your prowess as a real estate investor…i agreed with your that this was probably not a smart deal and that they want way more than what its worth.
My question was referring to how you came up with about $15k a piece for the land is all…
Also perhaps i should clarify…maybe it wont matter
The land has electric, sewer, water etc
One of the guys owns the structures outright and are part of the transaction
Does utilities and the other improvements add value to the land, even though they arent showing up on the appraisal records?
Im just trying to get info here. this is not a real estate investing deal, even though it would be sweet to turn it into one, perhaps with a deer lease or something!
Well it’s all a matter of pro-ration if 25% equals $15,050 at $86,000 then $48,123 equals 25% at $275,000!
Thought you pulled a fast one?
Next time as they say, just the facts you want info on! You supply $86,000 you get your information on $86,000!!!
Unless your looking for raw land in the middle of no where it’s still not a deal! And I know from experience that I would rather not have 2 other partners so I would much rather go find 313.5 acres or even 200 acres for $80,000 I own alone rather than get into something like this with partners and if I buy my own property it can be in a much better location!
Man chill out…i did say in the beginning that the 86k was the value on the appraisal district, which as we know is nowhere an accurate estimate of the FMV…i also said what the going price for land per acre was in that region.
The reason i thought this might be a good deal is for hunting and for keeping it in the family as something to pass down…not to make a quick buck. And typically hunting property is not really near a city, so yea its in the “middle of nowhere”.
i do agree with you about the 50% ownership…seems like it could be a big hassle as everyting we want to do with the property would have to be cleared by all owners. i do think you could make a profit if we were to turn around and sell it at some point at FMV, but idk if thats what we are wanting to really achieve here.
Thanks for your help! I do appreciate the feedback.
I don’t get it. You are wondering whether a large tract of land that doesn’t produce an income nor has a plan for development is a good deal (from a business perspective since you’re an investor forum)? Why mention it then? What did the previous owners that are selling it to your dad pay for it?
The point of the purchase was not as a business investment, but to simply own some land that could be used for personal use and for future family…
I wasnt sure if anyone on here was knowledgable about land purchases, i was kinda hoping people would maybe point out some pitfalls i should check for or something like that.
I guess my original question wasnt clear. I didnt realize i would incite so much uproar.
The people on this board look at any deal by the numbers, what a deal will cost to purchase/rehab, what it will sell for if its a flip, or what it will rent for vs PITI and maintenance,a raw piece of land doesn’t fit that model, its an alligator, you have to constantly feed it because there is no income associated with it,which is one reason it is extremely hard to get bank financing on raw land
you are placing a value on the land because you can hunt on it, pass it down to the next generation, nothing wrong with that, but its just not how we look at a “deal”
