Hi Everyone,

I would like to execute a project w a budget of ~2 crore INR.
I would like to buy an old house or a land in a relatively good place within the city (old known neighborhood), and convert into a 12-16 apartment building. The land seller as well as the constructor will be paid in cash & apartment in the finished building combination - This is the general idea.

I will thank you if you have any info on the following:
1. Recommended neighborhoods in Chennai where you can do that (Still has old ground houses)
2. Information I can read on web on similar projects or companies that deal specifically w such projects
3. Cost estimates, if anyone has on such
4. General opinion on the above and the potential profitability


Thanks in advance,
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  • What is your background?
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  • Originally Posted by sleacker
    Hi Everyone,

    The land seller as well as the constructor will be paid in cash & apartment in the finished building combination - This is the general idea.



    Thanks in advance,


    pls clarify the above statement
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  • Originally Posted by sleacker
    Hi Everyone,

    I would like to execute a project w a budget of ~2 crore INR.
    I would like to buy an old house or a land in a relatively good place within the city (old known neighborhood), and convert into a 12-16 apartment building. The land seller as well as the constructor will be paid in cash & apartment in the finished building combination - This is the general idea.

    I will thank you if you have any info on the following:
    1. Recommended neighborhoods in Chennai where you can do that (Still has old ground houses)
    2. Information I can read on web on similar projects or companies that deal specifically w such projects
    3. Cost estimates, if anyone has on such
    4. General opinion on the above and the potential profitability


    Thanks in advance,


    Sleacker,

    On prima facie, your budget is inadequate for executing such a large project within the city.

    if you are serious you can put in an advertisement under 'wanted' columns and approach banks and realty consultants.

    Given, the current tight liquidity position of the builders and NPA's with banks, some might even come forward and sell their entire stalled ongoing project to you and exit.
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  • Originally Posted by abk
    pls clarify the above statement



    It means that since my cash is limitted - I would like to pay advance in cash and than just give them apartments in the finished building.
    It reduces my risks/cash while give constructor & land seller the oprationity to make more
    CommentQuote
  • Originally Posted by sleacker
    It means that since my cash is limitted - I would like to pay advance in cash and than just give them apartments in the finished building.
    It reduces my risks/cash while give constructor & land seller the oprationity to make more

    U know what Sleacher. After reading Nabhishek say exactly what your budget can buy, you must have got the picture. Think of this. I for example have land. Now I will sell it outright if I want to exit. Or I will find a known developer, atleast an experienced new comer! and do a joint development. Or in my case I can myself develop my land. Now you might ask if I have the capital to build the building. Well even if I had, I wont need it. Land is the capital.
    To give you an example. I have a land worth 3crores on which I can build in today's rules 6 flats each valuable at 90L. Which means I will resell at 5.4C. Now to build these 6 flats might require say 1C to 1.2C. If you see the profit margin is 5.4-3-1.2=1.2C.
    Think of it. Why will I leave this 1.2C into your hand. Now where do I generate this 1 to 1.2C for building. I will start a construction with a few lakhs and get one customer. His inflow of 90L will sponsor my entire venture. Simple!
    In other words, with plain cash which is not big and you wantint 16 flats (unless you are talking about really tiny flats) you wont be able to buy off a landlord with cash. However the idea of some fallen project changing hands as Nabhishek said is possible though again you will get skimmed somewhere.
    Remember, if one flat is 1000sqft and is in a locality where it costs 4K/psft then it means 40L per flat. So 16x40=6.4C. Now your idea of 1.6C as joint partnership will work without doubt if your land owner partner takes everything later. However if you want to buy it in cash, you will never move forward.
    Unless ofcourse your project is in the outskirts of Chennai. Unfortunately you mentioned relatively good place in Chennai. I think you will be better off doing a different task.
    Just my 2cents worth.
    PS. Try asking this to Wiseman specifically. He might ask you to wait until the next Century and then do it! Since he will say price of RE will fall to 1Rupee/sqft by then. ROTFL.
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  • Originally Posted by sleacker
    It means that since my cash is limitted - I would like to pay advance in cash and than just give them apartments in the finished building.
    It reduces my risks/cash while give constructor & land seller the oprationity to make more


    you are saying you want to pay an advance to a landowner and then give the land as joint venture to a developer and then take the apartments in your share of the JV retain some and pay the balance amount due to he landowner as flats.

    why should anyone take you as a middleman for a JV the landowner will directly negotiate it with a developer and get his share which would obviously be more than what you would pay him.
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  • as nats said why would the landlord give it to the developer instead he can hire a contractor to do this job.
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  • Unfortunately Vijai most landlords are so LAZY and NON ENTERPRISING that they do let developers. However the developer they choose are ESTABLISHED names. Certainly they wont choose a middleman. None of them believe in treating their land as a Company and let an investor like Sleaker to buy shares, if what ABK said is the original intention.
    Honestly I think this thread is becoming confusing since the originator is neither clear about his proposal nor clear about the state of Chennai market.
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