Excellent Property But.. City Might Buy the Property in the Future.

[Nir]

Hi,

I recently learned that a property I considered purchasing might be purchased by the city due to transportation expansion in the area. they will have to demolish a few properties as part of the project...IF the project is approved and implemented.

However, the timeline is not clear - the representative from the real estate department of the city mentioned it can take 2-10 years. (however she sounded a bit like a salesperson so perhaps she knows more than mentioned)

Would you consider purchasing such a property assuming everything else about it looks great, meeting all your criterias?
In other words, would you not purchase a property due to this reason alone?

Is the main concern being the hassle of buying a property as long term investment then selling it too early or is it NOT getting its real market value from the city when/if they buy it? Lastly, the uncertain timeline itself (2-10 years!) - a positive or negative compared to being provided a final date say 2 years from now(?)

THANKS,
Neil

 

[Thomas Beyer]

very high risk as the property may be vacant for years as the neighboring buildings vacate one by one .. and yours is still not bought by city ..

unless you know for certain what the city will pay this is a risk I would not take .. and is likely the reason why the seller is unloading it ..

the only way for it to make sense is: you buy it for below lot value .. and run teh house/building in teh ground as a slum landlord .. so any income for 3,4,5 years is gravy ! Not one that I would love to do myself (and as such, advocate), but certainly a profitable strategy given the unknowns !

 

[Nir]

Thank You Thomas for the Excellent Feedback!

I`ll consider this one carefully and keep you update Thomas. As usual, the unknown creates both opportunity and risk.

Regards,
Neil