Another Dream Down the Drain

oldman

oldman

Well-known Member
Location
PA
I often thought about buying a huge piece of land and build a community of condos and apartment rentals. I wanted at least 75 condos and 100 apartment rentals. I thought I found the perfect spot about two years ago. I had a civil engineer friend of mine come out and meet me at the spot of the land and ask his opinion. He took some pictures, sent a survey crew our to measure and mark off the land and then made a rough draft of where the buildings would be erected and any other buildings that I had in mind would be added. I was going to add a convenience store with gas pumps and also add electrical hook-ups for electric vehicles.

Additionally, a post office annex would also be included. The land measured just over 200 acres, so there would be some room for additional units, if I decided to do so. The land at the time had two really nice homes built on the property. I brought a commercial real estate appraiser out to look at the property and give me a price of the land’s value. The property was zoned appropriately for what I wanted to do, so I would have had to just secure the proper permits.

The realtor called me on the day I was going to place an offer and told me a big commercial real estate investment company had just placed an offer. So now, I wasn’t sure what to do. At the urging of my real estate friend, I placed a cash offer of $1.85 mil. The company overseeing the real estate transaction and selling allowed the offers to be accepted for five days. Once the five days were up, they would announce who was the high bidder.

Along with my cash offer to purchase the land, I had already obtained the financing for building the complex. At the reading of the offers, the lowest bid was $1.35 mil, the highest was $2.1 mil. I was outbid. Not even close. After I lost that deal, I decided to give up. This whole ordeal has been very upsetting. I just drove past the parcel of land and I noticed the two beautiful homes have been destroyed and lying in a pile of brick and plaster. Sickening to see. It really cut into me.
 

Liberty said:
Maybe its just a lot of headache in your elder years to have to deal with all that. My mother used to say "beware what you wish for because you just might get it."
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I agree with Liberty. If you have the financial resources to consider a project of that scope those same resources could probably carry you thru the remainder of your days. So why bother wheeling and dealing? Why create stress for a few more dollars you may never use?
 
I don't understand this....
oldman said:
I just drove past the parcel of land and I noticed the two beautiful homes have been destroyed and lying in a pile of brick and plaster. Sickening to see.
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Weren't you going to do the same thing so you could build apartments/condos?

Either way, just step back, regroup, and wait for that next option. Good luck.
 
@oldman when I can't sleep I some times mentally design small homes/cabins.
One of the plans that wandered thru, was a community for older folks .
Which would have included about the same thing as your plans.

In the area I live in , thought we were going to get 2 large solar farms.
I think the only thing that has happened is destroying the timber at one site.

Some one wondered why solar when this hill top is Windy.

Around Erie am seeing signs not wanting solar farms.

Windmills have been suggested for Lake Erie. HUH,, say What?

Maybe you should check out this end of PA for vacant land?
 
Your original plan sounded wonderful.

We can understand your disappointment. When you put your heart into something then it does not come to fruition it’s very disheartening. I likened it to a bubble burst or a ballon deflating. But take heart. You are probably being guided down another path for a reason.

Here is a little story, no where your volume, but it may be encouraging.

My grandparents and mom and dad wanted to buy joint property back in 1960. They thought they found the idea location but were out bid. They were VERY disappointed. A little later they found and bought a property further out of the city. It ended to be SO much better than the first location.

This was right before I was born. When I was older I was told this story many times 🙂

My encouragement is just wait a little while, something better is about to come your way 🙂
 
oldman said:
I thought I found the perfect spot about two years ago.
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And you just recently were outbid on the property? You didn't mention the job opportunities for people to want to move to the community of condos and apartment rentals.

As for a mall. This article doesn't paint a pretty picture for success.

  • By some estimates, there were as few as 700 large shopping malls left in the U.S. in 2022.
  • Malls had an 8.7% vacancy rate at the end of 2022.
  • An average of 1,170 shopping malls closed every year between 2017 and 2022.
  • The average vacant mall sells at 43% below its acquisition price.
  • Shopping malls had a high-end average vacancy rate of 11.4% in 2021.

Shopping Mall Closure Statistics (2024): Are Malls Dying?.

From my perspective not another dream down the drain. More like a nightmare avoided.
 
Knight said:
And you just recently were outbid on the property? You didn't mention the job opportunities for people to want to move to the community of condos and apartment rentals.

As for a mall. This article doesn't paint a pretty picture for success.

  • By some estimates, there were as few as 700 large shopping malls left in the U.S. in 2022.
  • Malls had an 8.7% vacancy rate at the end of 2022.
  • An average of 1,170 shopping malls closed every year between 2017 and 2022.
  • The average vacant mall sells at 43% below its acquisition price.
  • Shopping malls had a high-end average vacancy rate of 11.4% in 2021.

Shopping Mall Closure Statistics (2024): Are Malls Dying?.

From my perspective not another dream down the drain. More like a nightmare avoided.
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Apartments and condos are in high demand in my area as they are in many other areas.
 
The objective is to build the complex, sell all of the condos and rent all of the apartments so that we have 100% residency (occupancy), then sell it to a major investor like Berkshire Hathaway or Equity Residential for a 40-60% gain. Maybe that clears up the muddy water.
I never intended to be a landlord, only a developer.
 
There are plenty of lower cost of living areas in the USA. Move to one. A friend moved to Oaklahoma so his SS and IRA dollars would go farther. The do. And He loves the place
 
If it was me in your situation Oldman, I'd find a place close-ish to town and build a bunch of smaller houses, without all the bells and whistles that are so impressive and popular with builders, and give first time home owners and young people a leg up into the market. Little 'boxes' that are well built, well insulated so utility costs are low, solar panels on the roofs......help them get started.
 

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