Has anyone had land they owned developed by a developer?

[BlackAmericanoNoSugar]

We bought a bit of land with a derelict house on it hoping to build ourselves a new home. It was a bit of a risk as we knew that the council it's in are very keen to densify because we have a housing shortage here. Anyway it became clear that we won't get permission for what we want, and what we would get permission for wouldn't be any better for us than just buying a finished house.

I could just put it back on the market and would probably cover the costs but a friend of my brother is a builder/developer and we will provide the land and he will do the rest.

My question is how have other people who've done this split the profits? Looking at costs it will cost approximately twice as much to build the houses as the land cost us, so we are providing a third of the cost and he is providing two thirds, so I'm thinking that it would be fair if we got a third of the profit and he got two thirds. He hasn't done this before either, he has always bought the site in the past to develop, in fact I outbid him for this site although I didn't know it at the time.

Bumping for the evening crowd.

No experience here but it might be good to post this on the Money Matters board as well.

We did this in the esrly 90's . Bought a chicken farm and built on it. we sold 7 years later. However by the time we had paid for the land, planning, drawings, builders, estate agents made less than 30K but it was a long time ago

Are you including his project management fee in the building costs or did you just price materials?
I haven't done a joint venture but know lots of people who have. The split is unique each time and depends on build costs, management fees, etc. As long as you can reach agreement thats all that matters ... oh, and have a detailed contract drawn up for every eventuality including if the houses don't sell.

There's no way that the houses won't sell, so I'm not too worried about that. People queue up to buy new builds. When the first phase of a new estate was released beside my DC's school people were queueing for up to 48 hours. At worst we would drop the asking price a little.

I'm not sure that he considered a management fee, though he has probably included some sort of wage for himself. What he normally does is buy land, build houses, sell them and then the profit is his. So on this plot he's proposing five houses, he has a ballpark cost for building each house, including everything like fees and planning. His ballpark cost sounds about right to me as we wanted to build a smaller house to sell and a bigger house for us to live in, and what he is proposing is pretty much what we were quoted for building the smaller house, which did include a management fee. The profit left after all costs will be about 30% of the total investment. He and I both think that a third to me and two thirds to him sounds about right since that's how the land/build costs are split, but we're both guessing a bit. I suppose if we're both happy then that's what matters.

Wouldn't it be easier to sell to him for a profit now? Do you want the aggro of planning, build uncertainties and risk of house market dropping?

I could put the land back on the market, but I've had it less than two years so the value probably hasn't risen all that much, so once stamp duty, capital gains tax and the costs associated with the failed planning application and the planning appeal are taken into consideration I would be walking away with a loss. Whereas with a development I would definitely cover costs and probably make a profit too.