All Forum Posts by: Kellum Lewis

3/2 manufactured home on 4.59 acres

2 other permanent buildings on property

Roof needs to be replaced

Leak underneath house - pipe needs repair

Flooring in kitchen needs to be replaced

Estimated repairs: $12K

Tax assessment: $61K

Comparables in the area are difficult to come by as not much has sold in this subdivision in recent years. The tax assessment on this property is approx. $61,000.00.

A reasonable expectation of return would appear to be:

ARV (After Repair Value)

$103,000.00

-List Price $63,500.00

-Repairs $12,000.00

-Holding & Closing $2,000.00

Potential Profit $25,500.00

This could also be a nice deal for landlords who are interested in the long-term gains from the area’s growth.

Buyer to do all due diligence. Seller believes the information provided to be accurate but makes no guarantee.

Keywords: Fixer, TLC, Investor Special, 3/2, Phenix City, Alabama, Columbus, Georgia, Ft. Benning

Kellum Lewis

(626) 872-LEAF (5323)

[email protected]

www.CommunityGreenProp.com

Vacant Fixer, Priced to Sell

1323 sf, 3 bedroom, 2 bath with lots of amenities, perfect for investors, first-time rehabbers, landlords or home buyers. Huge lot (.32 acres) for gardening or expansion.

Home comes with:

♥ Clean Title

♥ Situated on cul-de-sac for Privacy

♥ 3 Bedrooms with Walk-in Closets

♥ Living Room + Den w/Fireplace

♥ All Appliances (Washer, Dryer, Refrigerator, Stove, Microwave)

Roof has been recently repaired but will need to be replaced within the next few years. Kitchen plumbing recently repaired. Plumbing work needed in 2nd bath. Water damage in kitchen. Needs cosmetic update. $20K should bring this home into top-notch shape. 

Comparables in the area are difficult to come by as not much has sold in this subdivision in recent years. The tax assessment on this property is $66,915.00. A reasonable expectation of return would appear to be:

ARV (After Repair Value)

$89,500.00

-List Price $56,000.00

-Repairs $20,000.00

-Holding & Closing $2,000.00

Potential Profit $11,500.00

This could also be a nice deal for landlords who are interested in the long-term gains from the area’s growth.

Buyer to do all due diligence. Seller believes the information provided to be accurate but makes no guarantee.

Keywords: Fixer, TLC, Investor Special, 3/2, Phenix City, Alabama, Columbus, Georgia, Ft. Benning 

Kellum Lewis

(626) 872-LEAF (5323)

[email protected]

www.CommunityGreenProp.com

This is a follow-up to another post I made earlier. I've worked out some numbers and would love to get others' feedback.

A distressed seller contacted me. Her SFR is currently worth $389K "as is." (I've verified this number with good comps.) She acquired it from her parents who recently died. This was her childhood home and she wants to keep it. However, it has a reverse mortgage on it of $280K and the lender is calling for the balance to be paid. She doesn't have the cash.

I'm proposing to buy it from her for $290K (to cover any additional amount added before pay off) and give her a lease option to buy it back in 2 years at $350K. Her monthly payments would be $1700 in rent ($1800 is average for her area for a 3/2 SFR) plus $511 - the amount she'd have to save for 24 months to have a downpayment of 3.5% (for an HFA loan, for instance) on a $350K loan.

My hope is to sell this package to a buy-and-hold investor for $300K, which gives me a $10K assignment fee. The buy-and-hold investor then gets $2111/month minus expenses (tenant pays for all utilities and maintenance), taxes and loan costs (if they borrowed the money) plus the $350 sell price (minus the accrued down payment $12,250 -- which they already have from the monthly payment).

Here are the numbers for the buy-and-hold investor:

$2111/month x 24 months = $50,664

Minus taxes ($864/yr) = $48,936

Plus sell price = $398,936

Minus accrued down payment = $386,686

$386,686 minus initial investment of $300,000 = $86,686 profit

Cash on Cash return = 28.9%

If the tenant does not exercise her right at the end of 2 years, the buyer could sell the property. Prices in this area have gone up 102% in the last 90 days so, presumably, appreciation will increase over the course of the lease. I'd love to hear your feedback on this. Thanks in advance!

Kellum

Welcome Victor. Hi to others who've posted on this thread!

Hi Scott. I've reached out to a couple of people to see if they have anything available for you.

Kellum Lewis

Hi folks. I could really use some advice from more experienced investors. I have a property under contract in Alabama (I'm in Southern California), another strong lead in Alabama and another strong lead locally. All three are slightly different but are complex and I'm not sure if I can make them good deals or not. I'd love to hear your thoughts.

First, my current business model is as a wholesaler. I eventually want to get into rehabbing and buying-and-holding but I'm just getting my feet wet. Still, I don't want to pass up these opportunities if I can make them into a good deals.

#1 - The first property in AL is a 3/2 built in 1994. I have this one under contract currently The seller owes the lender $40K. The house needs about $12K in repairs to make it livable, about $20 for updating. Since it's in a somewhat rural location, even though it's just 3 miles from Columbus, GA, a mid-sized city, comps are difficult -- all over the place from $20K to $210K for similar properties. I've gotten 3 comps from a local realtor who reiterated the difficulty of getting accurate comps in the area. Tax assessment is $70K. I'm hoping ARV would be $80-90K based on sf of recently sold properties within the last 2 years.

I began marketing the property at $53K and have gotten a couple of looks but no strong interest. I'm wondering if it would be wise to give the homeowner what he needs to move on ($6K), take over the deed and mortgage (the lender is willing), get a hard money loan, do the rehab ($20K) and sell the property (hopefully for $80-90K). I'm worried there's no market and I'll be stuck with a house payment on a vacant property. I'm not sure yet if the lender will make me qualify for a new loan or take over the existing. If I take it over, the monthly payment is just under $600. I originally wanted to simply take over the deed and leave the loan in the owner's name but the owner ran this all by his lender without checking with me first. Thoughts???

#2 - While marketing this property, I was contacted by someone looking to purchase a place in AL but needs seller financing due to his poor credit. He now has a good job and wants to get back on his feel. He can afford a down payment of $5000-5500 and a monthly payment of $600. He looked at the above property but felt it was not as good a deal as another off-market property he found. This one is a 3/2 on 7 acres. The owner is elderly, now in a nursing home and the granddaughter is managing the sale. She thinks the property is worth $30-40K as is (again, difficult area to comp), tax assessment is $60K. She's adding up the repairs needed (just under $10K) in an effort to REDUCE the sale price in order to justify a smaller, quicker sale in case her grandmother needs to qualify for Medicaid.

The gentleman who contacted me wants to buy this property with seller financing. I'm contemplating getting a hard money loan to buy the property, give the man who contacted me a lease option and then either refi and hold it, have the new buyer get a loan in his name once he can qualify, or selling the property to a buy-and-hold investor with a tenant/lease option in place. I'm not sure if an investor would be interested in this scenario. I'm also having trouble figuring out the numbers on this and I don't understand the ins and outs of lease options very well. I'm tempted to walk away, partly because this isn't my business model yet, but I'm also open to trying to understand and making something like this work if I can.

#3 - Last, a So-Cal homeowner recently inherited her parents' place. She says it's worth around $400K (I haven't verified this yet) and there's a reverse mortgage on it of $280K. She'd like to stay in the home (she currently lives there) and wants to lease it until she can get enough money together to buy it back -- another lease option. I'd be in a similar situation as #2 above. Would buy-and-hold investors be interested in purchasing a property with a lease option tenant in place? I could really use some help figuring out the numbers and what works on these properties from someone who's more familiar with these types of situations. Any help is appreciated. (And thanks for reading this incredibly long post.)

Kellum Lewis

Thanks everyone for weighing in. I spoke with a realtor in the area who confirmed the difficulty of comping this property and Redfin doesn't cover this area. I was able to find some recent sales on Realtor.com as well as the cost per sf of those sales. Based on that number, looks like just over $80K would not be too much for a rehabber to ask and, depending on the quality of the job, might get a little more. I'm getting ready to post it in the BP marketplace if anyone knows anyone who might be interested. Again, thanks for everyone's input. I appreciate it. Let me know if there's anything I can do for you.

Hi Justin and others. I am a wholesaler in Pasadena. I agree with what Cornelius and Cody said. Pocket listings are really about relationships with realtors, banks, loan brokers, etc. You can get off-market deals with a lot of marketing and hustle, which is what I do. If you'd like, send me the details of what you're looking for and if I hear of anything is your area, I'd be glad to let you know.

If you're going to do direct mail, I would recommend going with a list of absentee owners/non-owner occupied properties. These are normally investors/landlords and, from my experience, are usually much easier to work with than distressed homeowners. You can get lists and have a company do a mailing for you all in one stop through www.yellowletterscomplete.com as well as others.

Good luck! Let me know if there's anything I can do for you.

Hey @Matt Weiss, thanks for that offer. The property is 4206 Freedom Ct, 36869. It's off 43rd Avenue, south of Crawford Road. I appreciate your offer to help.

Thanks @Richard Balsam! That's a great idea. I'll see what I can come up with.