HI all,
First and foremost I am a newbie and although I have not completely solidified my investment plans I do know i want to be a buy and hold investor of small multi-families. I am completely aware that as of now my plan below is half baked. I'm looking for some guidance so I can learn to ask the right questions, make educated decisions, and develop a solid plan to present for financing.
There is a house in my neighborhood (Dyker/Borough Park border) that has been vacant/abandoned for a long time. How long I’m not sure exactly, it has to be at least 6 years but judging by its condition maybe closer to 10.
I’ve done some digging online and found a few of the deeds. It looks like the home has been passed down by at least 4 generations and is currently owned by two brothers who live in NJ and never occupied or maintained it.
Built: 1910 2-Family Lot size – 40FT x 100 FT Building size – 20FT x 58FT
Back Taxes: $7,748.79 Annual Taxes: $4,904
Market Value: $1,175,000
(based on property tax assessment, building is uninhabitable so this is not accurate)
Department of Buildings: Violation – unsafe building issued 2010
My Half Baked Plan- I'm no where near acting on any of this so if I'm completely off base keep in mind i'm learning and would like your input.
OFFER- 100K cash (no inspection i will assume back taxes)
REHAB- 200-300K - Without ever stepping foot inside, I'm assuming that we would need to go to the studs, new plumbing, electric, roof, mid-range finishes.
GROSS RENT- $2,800 month - assuming both units are 1 bedroom to be conservative here but its more likely that they are 2-3.
FINANCING - Hard money from family and then conventional financing after construction to pay them back.
A few of the many questions I have:
To make the offer do I need to involve a realtor? I feel like the deal is sweeter for the seller if he doesn't have to pay commission.
If i don't use a realtor who do I use for offers and closing, an attorney or title company ?
Do you think I could go even lower with my offer? that is very low already for this area but the whole thing is a mess and they've shown no interest in it so if i walk in and solve there problem i'm thinking they might just take anything not to deal with it.
Maybe a better question what techniques do you use to feel out a sellers motivation?
What are typical closing costs with no realtor and all cash?
Rehab number is a complete assumption does anyone have experience with estimating cost in this area?
Since there are back taxes should I do a full title search before even approaching the current owner?
Thanks in advance for your input!
Laura
