Second Home Mortgage Interest Deduction?June 11, 2011
Welcome Summer Intern Kate Brittingham.June 13, 2011
Light industrial vacant land. Not exactly a hot bed of activity in the local real estate market. Not too many developers (read: none) are breaking ground on new speculative projects. Even fewer owner/users are expanding or building new facilities for their business.
Which is exactly why my client got such a great deal when he purchased this lot.
Way out Glendale Road in southern Blaine County is a nice little light industrial park called the Brown Subdivision. It’s near Webb Landscaping, Burks Excavation and Frankin Building Supply. It used to be next to KD Excavation and Starheat Masonry but they have left (another story for another time.)
Anyway, nice little project with one acre+/- lots fronting on Glendale Road and a few larger acreage parcels in the back.
I had the listing on the property which was a bank foreclosure. This property was originally purchased by a local contractor who was in the process of expanding during the heyday. The contractor financed the property through First Bank of Idaho before they were closed by the FDIC. He eventually ended up losing the property back to First Bank.
At that point the property was purchased from FDIC as part of a portfolio acquisition by a private equity fund from New York. An attorney buddy of mine had done the legal paperwork for the acquisition and referred the new owners to me as the local broker of choice. That’s how I ended up with the listing.
So, my other buddy, Preston Ziegler of Sawtooth Construction happened to own the lot right next door. It was a natural fit for him to purchase the lot. Both lots were an acre and had great frontage on Glendale Road. Plus, the extra land gave him so many more options for future development.
We weren’t getting any activity from other local buyers so my sellers and I determined the neighbor was the best deal.
Long story short, we kicked the deal around for quite a while and Preston ended up making a heck of a purchase at the bottom of a down market. Plus, the bank got a challenging asset off their books.
The cool part is that the purchase price for the lot $50,000, was way lower than Preston paid for his original lot. So combined, the second sale really lowered his average land cost in the project. This will definitely help make the project pencil out one it is ready for development.