First I am not economist, so sory if I am not using economicaly correct language. But this is a real life situation. I would like to know what are the buy out strategies for investor when he has to deal with multiple collective owners of large real estate that is impossible to be divided amongst them.

Also if someone is a collective owner in such estate and there is a buyer that is buying out the shares. What should be his best strategy to get most money out of this property ? Should he be one of the first to sell his shares or one of the last.

It should be takein into account that the communication level in between the shareholders is terrible due to mutual hatered :D

I am interested in the strategies for both investor to get the best deal but also for the single shareholder how to get the best deal. What behaviour is needed from both sides.

  • $\begingroup$ Does the investor require unanimous consent from the shareholders to buy the property? That is, would the investor not be able to buy the property as long as one shareholder is unwilling to sell? $\endgroup$ – Herr K. Feb 24 '18 at 22:46
  • $\begingroup$ @HerrK. He can by shares of the property as much as he wants. But according to the local laws he needs to have 100% of the shares to guarantee full control. Otherwise if he can not demolish the building and build something entirely new for example. So the answer is he can b7uy shares as long as the shareholder agree to sell but he require 100% shares to be able to control entirely the destiny of the property. $\endgroup$ – Alexander Petrov Feb 25 '18 at 13:13
  • $\begingroup$ There may be local laws that cover situations like this. The buyer wants to offer a flat bid for all units, but there is an incentive for a small holder to wait for an extremely ridiculous price, since they know that they hold the whole project hostage. Civic authorities want situations like that resolved, so I think they set up legal frameworks to break the impasse. $\endgroup$ – Brian Romanchuk Feb 25 '18 at 16:17
  • $\begingroup$ @AlexanderPetrov: Is there a discontinuity (e.g. a sharp jump) in benefits when the investor gains full control as compared to the case of partial control? $\endgroup$ – Herr K. Feb 26 '18 at 20:23
  • $\begingroup$ @HerrK. yes there is a very sharp jump due to several reasons. When you have share from property that can not be divided this shares have very low price because the only way to benefit from the property is due to rent. You can not even do a morgage because banks do not accept shares from undividable property as guarantee. Once someone manage to buy out the complete property there are multiple oportunities. 1 The property will have real price 2. It can be used as guarantee for the banks in terms of morgage. 3 The building has excellent location it can be demolished and new investment can spawn $\endgroup$ – Alexander Petrov Feb 27 '18 at 10:58

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