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You didn't read my entire sentence, nor my follow up post. It was specific in saying that if the builder buys the land, she doesn't get anything. If she is holding the land for him to build, then she can get a split. Don't cherry pick answers, read the entire thing. My term of "supplying" was meant as a sale. I'm not able to edit the above post, so I can see how you might have misread what I wrote.
I think you're further confusing things. In your first post you were clearly differentiating bringing land to the table vs 'fronting cash'. I think most people understand that if you sell your land to a developer, you don't just assume that you get a split of future profits. So your use of a vague term 'supplying' to mean selling makes no sense at all. Just own up to unclear and bad advice rather than getting aggressive and blaming people for reading it wrong or not reading full sentences. Everyone communicates improperly from time to time (although some here have a habit of it) and it's always better to just correct oneself rather than to blame others. Frankly digging in and blaming others looks very unprofessional.
What if the builder calculates his expenses so that the profit is less than the present day value of the land? It might be wise to include in any agreement a minimum payment equal to the value of the land.
I think you're further confusing things. In your first post you were clearly differentiating bringing land to the table vs 'fronting cash'. I think most people understand that if you sell your land to a developer, you don't just assume that you get a split of future profits. So your use of a vague term 'supplying' to mean selling makes no sense at all. Just own up to unclear and bad advice rather than getting aggressive and blaming people for reading it wrong or not reading full sentences. Everyone communicates improperly from time to time (although some here have a habit of it) and it's always better to just correct oneself rather than to blame others. Frankly digging in and blaming others looks very unprofessional.
While her initial post wasn't worded very well, I don't think that your aggressive, attacking style serves you very well, either.
What if the builder calculates his expenses so that the profit is less than the present day value of the land? It might be wise to include in any agreement a minimum payment equal to the value of the land.
And, perhaps the OP should forget "profit" and just strike the best possible package deal on a personal home, with consideration for the lot next door.
And, of course, this should be put on the table for proposals from more than one builder.
And, perhaps the OP should forget "profit" and just strike the best possible package deal on a personal home, with consideration for the lot next door.
And, of course, this should be put on the table for proposals from more than one builder.
Great idea Mike! This is what I am optimally trying to achieve I am trying to get my expenses down to build my home. Whatever gets me the most $. You hit the nail on the head and I would have never thought of this Kudos to you.
While her initial post wasn't worded very well, I don't think that your aggressive, attacking style serves you very well, either.
You're absolutely right Jack. I reread my post and the tone was far more confrontational than I intended. I apologize.
I do stand by my remarks that her reaction was inappropriate, aggressive and blaming but i should not have ratcheted up the aggression and I should have made my point in a less confrontational way. You're right for calling that out.
The old rule of thumb is the land should be about 20% of the value of the total price of the house. In my area due to land prices, that has been pushed up some..and of course can vary a lot from a lot of different places.
So that's one thing you might ask the builder is what % of the final sales price do you like to see when you buy lots. Then you might ask for that % of the profits, plus the lot cost...so you make money from the sale of the lot and a % from the sale of the house on it.
The old rule of thumb is the land should be about 20% of the value of the total price of the house. In my area due to land prices, that has been pushed up some..and of course can vary a lot from a lot of different places.
So that's one thing you might ask the builder is what % of the final sales price do you like to see when you buy lots. Then you might ask for that % of the profits, plus the lot cost...so you make money from the sale of the lot and a % from the sale of the house on it.
How do you propose that the 'lot cost' is derived? Do you mean an appraised value or something like that?
Are you suggesting a method where the total profit is split by house/land ratio plus some fixed valuation of the land? So the OP has no downside risk but gets to share in a portion of the profits?
Sorry but I fail to see how this suggestion makes any sense.
How do you propose that the 'lot cost' is derived? Do you mean an appraised value or something like that?
Are you suggesting a method where the total profit is split by house/land ratio plus some fixed valuation of the land? So the OP has no downside risk but gets to share in a portion of the profits?
Sorry but I fail to see how this suggestion makes any sense.
Sounds like he's suggesting the OP develop a contract with the developer where there is a fixed value for the land that will be paid to the OP upon sale of the completed new construction home. In addition, the OP will receive a percentage of the property commensurate with the percentage of value the land represents in the total cost of the project. So, if the land value represents 20% of the cost of the project (cost of land + cost of building new house) then the OP should receive 20% of the profit as well upon the completion of a successful sale.
Finding the value of the land usually isn't too hard unless this is a very rural area where there is not a lot of construction going on.
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They are helpful. 
I am trying to get my expenses down to build my home. Whatever gets me the most $. You hit the nail on the head and I would have never thought of this 
