All Forum Posts by: Joseph Johnson

I remember seeing on a appraisal it is about half the value of above grade finished space.

@don konipol

I am putting 15% into the deal.

Condo conversion experience: Me= None, My team I have put together: Some to lots. Team consists of agent (who is also a paralegal), lender (who is ensuring we set our CCRs and HOA so that we can qualify for government loans, since Bremerton is a Naval town), contractor, and real estate attorney.

Real estate investment experience: Was project manager for building to two rental properties. Compiled and managed my father's rental portfolio in Omaha, NE, value ~1 million over the last two years.

The condo conversion is fairly straight forward in regards to zoning with the city, since the townhouse project was meant to be converted to condos after completion but the builder ran out of money and project was never completely finished and went into foreclosure.

Hope that helps

Yes, I included basement square footage. Its finished and a walkout with filtered water views.

Hello All,

I got a contract for a three unit townhouse complex (currently labeled a triplex) Here is the property:

http://www.redfin.com/WA/Bremerton/1710-Houston-Ave-98312/unit-3/home/45474251

Plan is to convert the properties to condos and I already have confirmation from the city planning and building department that the triplex can be converted into three condos. Each unit is ~3150 square feet with water views from living room and master bedrooms in each unit.

Here are the comps for townhomes in the area:

http://www.redfin.com/WA/Bremerton/2556-Waterside-Ln-98312/home/12099487

http://www.redfin.com/WA/Bremerton/3119-Sahali-Dr-98310/home/2504543

http://www.redfin.com/WA/Bremerton/3142-Sahali-Dr-98310/home/2504528

As you can see by the comparables that are going for 220-230K, and only 1400-2200 square feet. So you can see that these could easily go for 230-250 (my agent thinks even higher). Exit strategy is to sell them off, but if not then rent them out. They would easily rent for 1500 each. And I could obtain conventional financing. Something you would be interested in? I need 400K and end value would be in the 690-750K range, term would be 6 months.

Thanks

Joe

I am extremely new to real estate investing, only owning a few properties and having project managed two of my own SFH. Want to get your advice on whether I should pursue this deal, its a huge project.

I have been offered first shot at a 10K square foot lot zoning LR2 , which essentially allows for cottage, townhomes, row, or apartments two stories high.

Its in a good neighborhood next to a park and the neighborhood next to it is one of the nicest in Seattle

We are close to finalizing price and terms. I even have them holding off on payment until permits are approved and they may even be willing to hold until project is finished (but the sticking point is the second position they would have during construction). So likely payment would happen just before start of construction.

I have recruited a builder friend of mine to partner with, but Seattle is not his primary building area and SFH are more his specialty but he has done multiple townhome projects and a few apartments.

I have found two private lenders willing to cover 100% costs of the following two options:

Build 12000 square feet worth of town homes (seattle uses this floor to area ratio to determine building size , for townhomes the conversion is 1.2 build-able feet per lot square foot. Preliminary costs to build would be 2.1 to 2.2 million for the whole project, lot cost, site work, permits, connection fees, points and interest, and construction.

New townhomes in this area are selling for $280/square foot, so an estimated gross could be 3,360,000. Not bad but that is a huge amount of money

Second option is to build a 13000 square feet of apartment complex. Apartments get a 1.3 FAR ratio to build on LR2 Cost to build would be very similar to the town homes even though it is larger, but has less roofing and siding etc. So would still be in the 2-2.2 million range for total costs. Rents in this area are going for $2/square foot. So theoretically 26000/month or 312K/year gross rents. Using 70% after accounting for tax, insurance, management, repairs, vacancy etc leaving 218K. Apartments in this area get a cap rate of 4-6. So theoretically, end value could be 3.5-3.9 million end value.

I obviously would lean towards the apartment option since it utilizes the value of the lot better. ( I really like how seattle does the FAR ratio system, that way a property becomes more valuable per square foot the larger the lot is).

Again, I am totally new at this, so I am wondering if I am getting over my head (well I know I am but wonder if it is worth a shot). Or should I do some feasibility and then wholesale the contract? Any help is greatly appreciated!

Hello...new to the site but lurking for a year. I have a question on how to set up a system with my dad for purchasing investment properties. Essentially, he has a good chunk of cash, a few properties he purchased with all cash but he has terrible credit. I on the other hand have great credit, a couple properties but low on cash. We want to form a partnership where he supplies down payments and I qualify for the mortgages (in my name only) and then add his name to title after closing. Is there anyone out there who has run into this and made it work?