All Forum Posts by: Curtis H.

Damn you Brad. You were right. It needs lots of work...for a rehabber. Repairs/upgrades are way more than $25K. More like $50K to make it look modern and pretty. At least.

So I just met with the seller. Condition for ME wanting to buy is almost perfect, minus the fact it only has one bathroom. It needs LOTS of cosmetic work, which I could care less about since I'll be living in it.

Pros:

Needs lots of work, turning him off to going the realtor route to sell

Huge lot. Great backyard with potential guestroom/office, which I need.

It's liveable now

Only has $68K left on loan

I think he has taken a liking to me and I showed up first

The home next door is over 2000 sq ft and has 2 bathrooms and is on the market at $615K. It's been listed for 85 days meaning they are overpriced. Nothing last that long here. It will sell for $595K probably. Which means it will be easier to justify to him that his home that is 1300 sq ft with one bathroom and needs a LOT of upgrades is NOT worth $500K as it sits.

Cons:

He thinks it's worth $500K in current condition. I disagree for the reason above.

$500K is out of my price range. I don't think I can pay more than $420K to make this deal make financial sense, even though at $500K, it's still a deal as an OO.

What would you do?

Brad,

You are probably right. I have no real experience on rehabs so my numbers are off more than likely. Thats good info though as I am going to meet with him now and that will only help negotiations knowing there is more work that needs to be put in it.

I'll let you guys know how it goes!

I don't think he is motivated enough so I don't think it's going anywhere. But I need the practice and you NEVER know.

The home is about 1300 sq ft and although I will see the home today, it seems its in good condition, but not near perfect.

Roof is new, sprinkler system, and electrical. Everything else is probably pretty old. It is also a 3/1, not a 3/2. That makes it a less desirable home in a very desirable area. Adding a bathroom is about $15K from what I read. I could be way off.

So the way I see it, if I buy it for say, $400-$430K, live in it, add the bathroom right away and other upgrades over a 3 year period, the home will easily be worth $600K in this zip code.

So there is no way you would creatively try to structure a deal in this situation? I mean, I could get a realtor and look for a home in my price range with traditional financing, but that doesn't exist or is extremely rare. Hence being creative.

I just would feel dumb buying a home traditionally after mailing yellow letters!

Meeting with a seller tomorrow based on Michael Quarles' advice on marketing to 65 and over with equity.

Home worth $450-500K as it sits now.

Owner bought in 1988 so nearly paid off.

Took $125K loan out on home 5 years ago.

ARV on this home is probably about $600K after $25K worth of improvements.

I only qualify for $415K or so conventionally, nor do I want to go that route. I will live in the home as an OO.

Seller's motivation level is medium. Wants to build a custom home that will cost $300K or so in a place much less expensive.

What is a good way to structure a deal?

Hello all,

Here is the situation. Did a yellow letter campaign to about 400 people. Got 3 calls so far. This home is for me to live in, not flip or rehab and resale.

Guy is over 65, has plenty equity, house is worth about $500K the way it sits with no improvements. That may be a little off as it's a 3/1, where the 3/2 homes in the area are going for over $600K in some cases. 3/1 I saw only sold for $440K. I am only approved for about $415K conventionally, but I don't want to go that route if possible.

His situation is he is semi motivated, wants to build a new home 2 hours from his current property, where he has land and it will cost no more than $300K.

I'm needing advice on ways to structure a deal.

I'm thinking...

1) Give him some cash, and ask him to carry the rest. If his new home will take 6-8 months to build, he will need a place to stay in the interim and I can offer to take care of that as incentive to get him to move quicker.

2) He has taken out a $75K and $50K loan on the home already in the last 7 years. He bought in 1988 so it is almost paid off I'm sure. So sub2 is out of the question.

3) The ARV of this home is probably around $600K in this zip code, as its the most desirable in the city. Of course repairs are needed. If i could get him to agree to $450K, that is 75% ARV (but not minus repairs, which are cosmetic). Would a private lender fund this deal?

Do I go there with contracts ready just in case he is game to be moved into an apartment until his home is built?

Any advice is appreciated!

Ok so when mailing to elders with at least 40% what is their motivation to sell? I did a search for 90-95% equity in my city and to my surprise got back 156 records. So basically I assume they pretty much own free and clear. I just don't see why they would sell at a discount.

2) I've had two investors at local REI clubs suggest going after those with not enough equity to sell via a realtor (10% or less I would imagine) and fix up, and offer to take over Sub 2. Whatcha think?

Thanks all, I want to mail off by Friday.

From what I have seen it varies. I can get an absentee list for free from a title company that works with investors at a REI club. Mortgage lists cost money. I've been quoted less than 10 cents per record, and over 25 cents per record.

Hey guys,

Bringing back an old thread as it's go time for me. The goal is to be in a home by end of January. Not sure how possible that is, but I'm going to try. Like and health got in the way and derailed me, so I'm playing from behind.

I got a title company to run Michael's suggested search (SFR, 3-5 beds, OO, 15 year ownership, 40 percent equity and 65 years old.) and got about 400 leads for the whole city. Many of them have taken loans out or refinanced since the record date, but the LTV is showing 0.27 or 0.53, etc. I'm assuming that means 74% and 47% equity?

The other issue is that every home I look up on Google Maps is in immaculate shape. I'm not sure that matters, but it doesn't seem like they intend on leaving anytime soon.

And lastly, should I still be hitting up absentee owners as well? Or mortgage lates? Seems like mortgage lates will just ride it out with free mortgage until they are kicked out.

Thanks

Ok fair enough...

Now in the case of the 65 year olds with 40% equity, in your experiences what motivation do they have to sell again? Besides going to a nursing home?

And if I was looking to take someone's home Sub2 I would market to mortgage lates? I'm guessing those are my two best shots. A sub2 deal where someone just wants to walk away or a motivated elderly seller or someone leaving town who needs to dump it FAST.

The challenge is homes don't seem to stay on the market very long here, so selling via a realtor isn't a bad option. It'll likely be gone in weeks if priced right.

Just curious, is there a way to find out what homes have converted garages? I'm not against that at all and prefer it since homes are so damn small here. I know it hurts resale but I'm not worried about that. In fact it may help since there may be homes on that can't sell because of that.

And Michael, I'm probably going to buy that list from you tomorrow :-)

Called your company earlier and they were very pleasant.