Fantastic deal, Jerry! This sounds like an awesome investment. Your hard work and action seems to be paying off.
Cheers,
KC
Hello everyone,
I'm in the process of deciding the best course of action for selling my property, and I could use your collective wisdom or experiences on this matter. I own four adjoining vacant lots, each approximately 0.65 acres in size, making up a total of 2.5 acres. These lots are all waterfront properties, providing about 325 feet of navigable waterfront access. Each lot is zoned Single Family Residential.
Here's my dilemma: I am considering whether I should formally combine these lots into one large parcel before selling, or if it's better to keep them as separate entities. I intend to sell all four lots together as a package deal, regardless of whether they're combined or separate.
Pros of Combining Lots:
- Simplified Selling Process: Potentially easier to sell one large parcel than multiple smaller ones.
- Increased Marketability: A larger, single lot may appeal to buyers looking for more space and privacy.
- Potential for Higher Value: Combining the lots could increase the overall value due to the larger size and unified waterfront access.
Cons of Combining Lots:
- Limiting Buyer Pool: Some buyers may be interested in smaller, less expensive parcels.
- Zoning and Regulation Challenges: Combining lots could complicate zoning and what can be built on the property.
- Costs and Legalities: There may be costs and legal procedures involved in combining the lots officially with the county.
I'm leaning towards combining them for the simplicity and the unique appeal it could offer to a certain market segment. However, I am concerned about potentially narrowing the pool of interested buyers or encountering unforeseen legal and zoning challenges.
If anyone here has gone through a similar decision-making process or has expertise in real estate, particularly with waterfront properties, I would appreciate your insights. What are the pros and cons you've experienced or observed with combining lots? Are there any pitfalls or advantages I might not have considered?
Thank you in advance for your advice and experiences, I look forward to your responses.
Best regards,
KC
We have our 3rd Property under contract and plan to close in a week. The house is in a high appreciation area. Trying to figure out what the best exit strategy is. We are open to suggestions for different strategies than we're currently considering. We've been told seller financing may be a good option and we're open, just don't know how it would all play out, please advise.
We plan on paying cash for Acquisition & Repairs. This would be our first DSCR loan, and while I believe I have an idea of how it will all play out, looking forward to seeing the process.
Initial thoughts when putting property under contract were [repair, Rent, DSCR c/o, hold]. We will be taking possession with renters in place that are currently paying $750 a month. The plan is to wait to give them notice until day of closing, as requested by the seller. Rehab timeline less than 1 month after they vacate.
Now considering letting them stay, raising rent to $900/mo, completing minimal repairs as the house is currently in acceptable shape to them & good condition overall, DSCR c/o on a lower ARV. Will need to increase reserves going this route to account for future repairs. This will require less cash invested, shorter time frame to complete, and more cash we take from the deal.
Exit Strategy 1 - Have current Renters vacate, complete SOW, get new renters @ market rent, cash out on max ARV, HOLD.
ARV: 126,000
Acquisition: $60,251+ Closing $925
SOW Budget: $15,750
Rent after Rehab: $1,000
DSCR c/o $100,600 Loan @ 7.5% 30yr LTV80%: $840 PITI + Fees +/- $4000 (2pts+undw/orig/leg)
Cash Flow: $160 before Reserves
Cash Out - Cash In - Fees: $19,674 (100,600-60,251-925-15,750-4000)
Exit Strategy 2 - Have current Renters stay, complete light SOW, raise rent, cash out on lower ARV, HOLD.
ARV: 110,000
Acquisition: $60,251+ Closing $925
SOW Budget: $2,500
Increased Rent: $900
DSCR c/o $88,000 Loan @ 7.5% 30yr LTV80%: $752 PITI + Fees +/- $3800 (pts+undw/orig/leg)
Cash Flow: $148 before Reserves
Cash Out - Cash In - Fees: $20,524 (88,000-60,251-925-2,500-3800)
We're in Phoenix and have owned a rental in Oceanside for quite a few years. It's a beautiful home (in Rancho Del Oro) and hasn't been vacant a day, but we've had several issues through the years with the plumbing. We were told it was construction in the entire subdivision. This time it's the tub that's rocking in the master bathroom on the second floor. We're told it wasn't installed correctely. It looked as if it just had to be regrouted, but no. One vendor quoted us $11k-$15k to demo it and do the necessary repairs and bring it up to code. We thought of having it converted to a one-piece acrylic or fiberglass shower and called Home Depot. They're still around the $15k.
Between paying for a family emergency and some remodeling on another rental, we literally can't afford it at this point. We were hoping we could've just done it for about $4k. (Yes, I know it's more expensive in SoCal.) We owe about $130k on this home that's worth north of $900k. We're not keen on getting a second mortgage. While we're raising the rent by a couple of hundred dollars, it's not even paying for the hefty repairs last year.
My first question is does anyone know of someone more reasonably priced in the area who could come out and give the PM a lower quote? I suppose we could leave it as-is for the time being and not raise their rent by the $200 we had planned to until we could afford to repair it. There is another bathroom in the house. I certainly don't want to run up another $20k on a charge. We discussed selling or doing a 1031, but the commission would be about $50k, and we don't want to lose that now.
Any ideas?
Thanks.
Best of luck,
KC
I'm excited to learn from this platform and all the members available to me!
I don't find a lot of Montanans; I'm interested in building a great team so I can begin wholesaling and finding short- and mid-term rentals in both Montana and Arizona!
KC
Looking for seasoned investors in the Jacksonville/St. Johns area. I am new to Florida and trying to navigate the market to find cash flow deals. Thank you!
Cheers,
KC
I just recently purchased a single family hoping to fetch 2k monthly. It currently does not have a washer and dryer. I was thinking of buying a pair used to give the house an added amenity to help entice renters. Is this a good idea? or is it putting a burden on myself to be responsible for repairs, or is it no different from a dishwasher or fridge anyways.
thanks for reading
So I have three prospective tenants for my property in Philly who are interested in renting but one only needs a 6-month lease and the other two are fine with an annual lease. I was thinking of signing all of them into an annual lease and adding an addendum allowing the one tenant to sublet with a person I approve of. There’s also the option of having them all sign two 6-month leases but then that does provide the chance they all leave after 6 months and my unit has been vacant for quite some time so I need to recuperate. Any specific concerns with subleasing or anything else? Other suggestions are appreciated
@KC Pake can you clarify unsecured since you compare vs a traditional mortgage. Do you consider private or HML unsecured or are you specifically talking about Personal Loans, Personal Lines, Credit Cards or Student Loans? I do Private Lending and wouldn't offer an unsecured loan. I always have a recorded lien with LTV
Interesting. Are you bringing this up because you sell Unsecured Term Loans?
Regarding point 4, how would unsecured term loans lead to higher returns than a typical mortgage?
What are the fees, terms, and rates for these types of products?
@Scott Jensen I appreciate your response to my post!
No, I wouldn't say that I sell unsecured term loans but we do offer them as part of a variety of funding products for investors. This post is not meant to be a sales pitch. I posted the topic as a financing option worth considering for real estate investors, especially those looking for alternatives to traditional mortgages, or HELOCs. I have used the unsecured term loan option in several of my RE investments.
Regarding your question about point 4, unsecured term loans can potentially lead to higher returns compared to typical mortgages due to several factors:
Speed and Flexibility: Unsecured loans often have quicker approval and funding processes than secured loans like mortgages. This speed can be crucial in real estate investing opportunities.
No Collateral Requirement: Unlike mortgages, unsecured loans don't require property as collateral. This absence of a lien on the property can offer more flexibility in deal structuring, potentially leading to more profitable investment strategies.
Leverage: Unsecured loans can be used in conjunction with other financing methods, allowing for higher leverage in real estate deals. This can amplify returns, although it also increases risk.
As for the fees, terms, and rates for unsecured term loans, these can vary widely based on the lender, the borrower's creditworthiness, and market conditions. Generally, you can expect:
Interest Rates: Typically higher than secured loans due to the increased risk for the lender. Rates can vary significantly. Generally, we see rates between 8% and 18%
Loan Terms: These can range from short-term (5 years) to medium-term (up to around 12 years), depending on the lender and the purpose of the loan.
Fees: Origination fees, and processing fees are common. The specifics depend on the lender.
Loan Amounts: Again, many factors drive this answer. This loan product is often smaller than mortgages, reflecting the higher risk without collateral. The lenders we work with normally offer between $50k and $300k.
I hope that helps answer your questions.
All the best,
KC