Quote:
Originally Posted by Oleophobic
Thank you. To clarify further for my understanding, in your example above (4 floors, 15k sqft, 10 duplexes). Your 1.7 estimate in that example is 1.7x the value of the land for my duplex? BC Assessment shows $1M for land, $300k for the building. This means they may realistically offer me $1.7M as a final offer? If it were a high rise of 30+ floors, offering 8-10x ($8M to $10M)? That's pretty insane lol
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The general rule of thumb for developer to make a reasonable profit is that the land cost doesn't exceed 50% of the total value. So say the example I used, 15,000*3.4=51,000@800/sqft=40MM. That's the total revenue builder would get from selling the whole project. Meaning that they wouldn't pay more than 20MM for all the lands. If the 10units are exactly equal in size for simplicity sake, dev wouldn't spend more than 2mil each.
So, you'd want to negotiate a number as close to that as possible, but every case is different. That's why I said it's best to hire a very good land assembly lawyer to negotiate because he'd know what's a proper valuation given the developer's intention then arrange terms and prices accordingly.