Financing two semi-detached houses through the sale of one half.

Hello,

a large, sought-after plot of land in the east of Darmstadt has changed generations. Unfortunately, none of the three heirs can buy out the others. Each share is worth at least €500,000. Only one party wants to be paid out, one would claim a small part (e.g., the roof) for living. The third party is interested neither in a right of residence nor in a payout and would support a construction project. Since I would like to keep the property, I would like to know whether my idea seems even remotely realistic or feasible. The price per square meter for a new building for sale on the plot is expected to be between €4,500 and €5,000. The existing house would have to be demolished. Two semi-detached houses would have to be built, the costs of which should not be higher than the sale price of one half. I could pay out one party and arrange with the other two, who are also interested in keeping the property in family ownership. Renting out the second semi-detached house is conceivable. One would be occupied by me as well as another party. The plot allows generous development; the neighboring house to which one could refer has three full floors plus an expanded attic and a two-story outbuilding.

Thank you for your opinions, ideas, and arguments

Two semi-detached houses would have to be built, the costs of which should not be higher than the selling price of one half.

Roughly estimating construction costs of about 500k per half, a semi-detached house would have to be sold for one million. Is that realistic for you? And is the plan still realistic if construction costs increase and an additional 100-200k must be charged? At 4.5-5k/sqm I don’t see that working out, since you roughly have 3000 €/sqm. You will need a significant amount of equity. Keeping the property and selling half contradicts itself for me. Do you want to live in a semi-detached house and also have someone else live in that half? In fact, you then have an apartment in a 3-4 family house and neither a house nor a semi-detached house.

I summarize what I hope to have understood: 1. there is a developed property, whose development is assumed to be demolished; 2. you want to live there with your partner (who is not also part of the community of heirs, therefore called "weitere Partei"); 3. for this purpose, the property is to be newly developed, with a semi-detached house, one half of which you yourselves will occupy; 4. the second half of the semi-detached house is to generate income, through rental or sale; 5. the income, if it takes the form of a sales proceeds, (then of course including the land share) should reach the amount of the construction costs. In other words: semi-detached house 2 with land should bring in a sale as much as the demolition and construction of the entire new semi-detached house cost. Except for (possibly borrowed) liquidity for interim financing, you do not want to invest any further money in the project; your payment obligations to the co-heirs remain excluded in the (milkmaid?) calculation. If there is no miraculous value creation that I inexplicably have overlooked, it seems to me that a fool as a sponsor is necessary for the desired calculation to work (?)

I understood "Weitere Partei" to mean that there are 2 residential units in his half.

Write the structure in a clearer way. Are you 3 or 4 heirs each with a 500k share? How much equity do you have? You need to pay out the one and be able to have about 400 sqm of living space built. How do you want to finance that? And all this, only to then share the huge plot with 4 (or even more?) parties? New construction for rental purposes generally makes little sense anyway, just as a side note.

I'll keep it short: This has the potential for
- financial suicide
- being stuck with a new building
- unwanted landlord life
- family conflict

Sell the stuff and that’s that. You can buy something else with the money (land / house / ...).