Is this a deal in the SF Bay Area?

Question

Hey, bigger pockets

I may have stumbled upon my first RE deal in the SF bay area!! let me know what you think.

Plan:

Buy and hold, I am looking to move in and possibly house hack a bedroom. ~700/month

About the property:

4 bed 2.5 bath 1700sq townhouse off market. The owner/agent is offering it at $680,000 ferm.

Needs:

Full rehab but its livable.

Rent:

ROM has it as $3500/m

Comps:

2 bed 1.5bath updated listed at 575,000 (redfin estimates 610,000)

3bed 2.5 bath updated sold 685,000 in April 2017

Also, the seller is a realtor too, I have not agreed to let him represent me as the seller but I'm open to working with him to possibly make the deal work.

Loan:

30 year fixed 20% down 4.25

Let me know what you think.

thanks MP

Matt K. · Answer

https://sfbay.craigslist.org/sby/apa/d/3-brbath-town-home-in/6303742779.html 5 seconds on craigslist... no room mate needed, no 200k needed.

Markus Powell · Answer

@Sam Shueh Thank you for analyzing this deal. I'm going to move on. I'm going to make a spreadsheet of all the due diligence that needs to be done. thanks .....and on the next

Sam Shueh · Answer

Not my deal. Several things do not gyrate. What is the appraised value from a third party (independent appraiser) say? A full blown former appraiser that you need to get a mortgage.Your comps values are not right. I want a 3 or 4 brm, 1500-1900 sf town home with similar hoa due +/- 10 years within 1/2 mile or so sold last 90 days, same school or equivalent quality. I will never use a realtor's CMA as he will find you inflated values. As a realtor he only needs to pay buyer agent not on his side. If he puts on the MLS he will get all kinds of offers high or not why he is selling as "pocket listing just to you 680 ferm"? Your rent of $3500 is high. For single family homes in central, Cambrian Park, Campbell I see one may have to pay that much. This one in North SJ even very new in move in condition with attached garage will not fetch that price. Rent is way slower each year with peak 2.5 years ago. So unless I hear the appraised value -rehab cost(inside is never much if you know what your are doing-2.5%) is what the highest you want to pay. You can hire a realtor to represent you to make it easier and fair (you pay him direct).

Markus Powell · Answer

Update....so the townhouse hit the market this morning. After meeting with the seller my realtor thinks the I should offer $650. I am strongly considering it. If I can get it for that it will bring down to PITI to $3550

Markus Powell · Answer

That duplex is more ideal, I will keep my eye on it. I just hope the market does not push the price up any higher.

Matt K. · Answer

785 is for a duplex (which would be easier to house hack) vs 680+ mysterious amount of rehab and only being able to rent a room.

Brent Coombs · Answer

Though at $785k, the $680k one look more promising after all, right?But take note everybody: LIST price doesn't mean ANYTHING!

Matt K. · Answer

If you're trying to house hack... https://www.redfin.com/CA/Alameda/20-Maitland-Dr-9...feel free to send me finders fee, k thanks lol

Markus Powell · Answer

Thanks, BP communityIT seems that this "not so deal" is looking like it may fall apart. I contacted my realtor to take a look at the property and to negotiate on my behalf. I'm thinking he may be able to find a price that works for both of us. Worst case is that the property hits that market and I can watch it form there. I'm really not in love with this property because I'm not really into rehabs, I was hopeing to capitalise on the crazy apreacation that my area is having. Moving forward I will keep looking for a more "move in ready" property that I can househack. My only issue is that properties that meet that criteria are mostly out of my price range or in a bad area. And the search continues...

Brent Coombs · Answer

Why ask "What do you think would be a good deal on this property" - when you've already been told "$680k FIRM"?If this Realtor would actually NOW talk to you about a "deal", I reckon you should walk away - on principle!What principle? The principle that he'd ALREADY be proven to be a liar (if he did now consider a lower price)!But can't a Seller change their mind? Sure. But with him, it would PROVE that it's just a game to him.Playing with YOUR tens of thousands of EXTRA dollars, when you shouldn't have been asked to believe he's "firm"!Thanks for sharing the Realtor shenanigans that seem to still be rife in that part of the world.How about: subletting your CURRENT rental to help out with your expenses? (Or, consider doing THAT, elsewhere?)If you've got $200k, you probably should look for a GENUINE off-market deal, from motivated/distressed Sellers!...