Real Estate Law
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Good afternoon. This will obviously be a very complex transaction for you. The thing you want to be careful about with the developers is the fees and cost reimbursements they take out. In these type deals, if you're not very careful, you end up having the equivalent of a net profits interest in a movie...where the movie is hugely successful, but due to the developer fees, overhead allocation, reimbursements, etc., you end up getting basically nothing. So, you either want to sell them the land at the much higher value or you want to make sure that: i) you limit their fees and reimbursements until and unless you get a return of your investment plus a yield and then you get a carried percentage after that.