Developer wants to build on our land - need advice

[hc_andy]

Hi all...

We have a large block of land purchased some 20 years. Recently the unoccupied land nearby are being subdivided and developed, and what once was empty land we drove past on the way home is now filled with residential houses.

Our block of land can be roughly divided into about 48 blocks where each block is large enough for a house to be built on.

We met with a developer recently who said he could start building on our land at no cost to us. We would not have to put any money in and he would take care of everything and when the development is sold, we would share in the profit. That's how he would make his money. Is there a name for this sort of development? What are the pros and cons. Seems too good to be true if we don't have to outlay any money. What questions should we be asking him? Could this be some sort of scam. The developer was recommended by a friend of ours.

Thanks.

 

[NedKelly]

It's called a joint venture. He will probably want to borrow the money to fund the building by mortgaging your land. It could work out well but make sure you understand all the risks before signing up. If it all falls apart you could end up with nothing.

 

[hc_andy]

Apparently he also runs his own bank, construction company, real estate agemt,etc. According to him because everything is owned by him, he can keep the cost down.

Not sure if he is a bank, but uses that term a lot. This is his website.

CHARTERED SAVINGS LOAN AND TRUST LIMITED
http://www.cslt.co.nz/

Didn;t think it was that easy to open your own bank.

Any further advice or what to look out for would be greatly appreciated.

cheers.

 

[jim1964]

My 2c worth, The NZ at the end of his site would ring alarm bells for me.

 

[Aaron_C]

You believe this guy?????

 

[hc_andy]

You believe this guy?????

At the moment I'm looking for pros and cons to what the guy has proposed. What should we be looking out for? Are there any industry bodies we can goto for further advice, etc?

 

[handyandy]

Look at the site - all under construction.

This could end up happening on your block of land with the bank coming along to foreclose on your block.

All that glitters is not gold so don't be distracted by his shiny watch.

 

[hc_andy]

Having said that, can anyone recommend a reputable developer so we can get a second opinion.

We are based in northern suburbs of Victoria.

thanks.

 

[Aaron_C]

Having said that, can anyone recommend a reputable developer so we can get a second opinion.

We are based in northern suburbs of Victoria.

If you want someone to come and do a JV with you I have plenty of people who are interested - particularly in a development of that size. PM me. I am not a bank, but I know what to do

 

[cu@thetop]

My 2c worth, The NZ at the end of his site would ring alarm bells for me.

Same here. That's the first thing I thought. How are you going to get someone to build on your land without somehow surrendering an interest in that land to them or a 3rd party.

 

[vaughan]

Look at the site - all under construction.

Isn't that to be expected for a developer? Like, a good sign?

 

[Telejazzer]

Nothing wrong with the deal as Ned said it's a Joint Venture.

Pros: You get the agreed value of land, plus profit share on the finished project.

Cons: Land valued less, delays during the development process and you probably paying higher taxes because the value of your land has increased.

Check out if he's managed to finish similar projects. It's a chartered savings which probably means investor driven with high interest rates. Seems like there's a few of them popping up.

If you are heading down this path, it's probably a good idea to get a good property lawyer. Just be careful of who you ask as some them charge you a lot of money for simple queries. I know.

Based on the info provided so far, it seems like this guy is inexperienced, just starting out and probably a risk to deal with.

 

[Pete Ramoza]

If you are seriously thinking about entering into a JV with this company, get a good lawyer to do some background checks first. Business history, previous developments etc should all be foreclosed before you sign up for anything.

 

[Spectre]

Gooooooogle

 

[Scott No Mates]

Where's the ABN?

Gimme a D
Gimme a O
Gimme a D
Gimme a G
Gimme a Y

 

[esh]

sounds like an option deal? He seems to have alot of interesting things going for him. Maybe talk to other developers and get a good lawyer

 

[jrc77]

Has a facebook page - so must be legit. Founded in May 2013 I see, so long trading history.

Regards,

Jason

 

[Hypnotic Cat]

I'm by no means an expert on developments, but one thing I do have have is a built in BS detector... and right now it's beeping loudly. Just looking and reading the tone of his website rings alarm bells for me. Tread very, very carefully. Or better still avoid all together and find a better solution to developing your land.

Seriously, would you do a multimillion $ deal with someone that touts this kind of guff (from their webpage):
"This Bank Gives YOU what YOU want....within Reason!!! Belong to the Bank that LISTENS...That CARES...That WORKS for YOU...That believes in YOU."

 

[joshp]

He`s website does look a little dodge to me...
just my 2 cents..

 

[bashworth]

You are talking about a multimillion dollar development. Invest a few thousand on some professional advice and make sure you are getting more than one offer.