I’ve discussed in the past the ugliness that can surround the inner city land deal. Essentially all the fangs come out to extract that sweet nectar at the time of transaction of the funds, and we are talking about a percentage of a property up for grabs. Those that want that money the most have little to no work to do and just fill in blanks on a software that contains all the boiler plate legalities. Somehow this costs the deal that infamous ‘7 and 3’ because the value of the work done bears no relationship to the time invested. That percentage is really equity, the value that a home owner could have spent decades accumulating in little mouse sized bites, month after month of saving and sacrifice and planning, while the note holder carved off its share, and tax bill increased regularly beyond inflation, the roof and water tank eventually needed done, while the market cycled up and down. All that is bartered over when the time comes that a property must go to the highest bidder, a final and irreversible contract that comes down to a simple six digit number (usually). At least for the properties I have been buying lately, the circumstances tend to include an owner who had held the property personally or as a rental for a very long time. The terms of the deal are so simple that a contract could be drawn up on a single page, but, this is not how it works. The buyer and seller could do it face to face without any intermediary, but again, this is not how we do it. Various strategies are deployed by the builder depending on the temperature of the market and eventually the deal gets made. I've found the fewer parties involved the easier it can be. The intermediaries can act as deal bullies because they want to prove how important they are (to justify the cost to involve them) and become obstacles themselves to making the deal. Other times it all goes well and the roadblocks get smoothed over by playing with the price. Such is the case is what we are going to call the parkdale deal. Sounds like we go from K35 to P35, another bizarre coincidence or is this construction fate?
A deal gets done and everyone knows what happens next…