All Forum Posts by: Account Closed

Hello BP Community

I have a rental mid-$500K SFH in suburbs of Washington DC. This a typical suburban community with homes that are 5 bedrooms, 2.5 baths and 2500 sqft of living space. The house was built in early 90s and has not had any major rehabs or upgrades, except brand new roof and hardwood on first floor. I am considering a small upgrade project to increase the value of the house by hopefully $30K and my budget is around $5-10K to get a HELOC. I do have access to contractors that work with investors and from labor standpoint I can beat market average.

Here are some of the upgrades I'm considering but recognizing that I can't do all given the limited budget. Which high value high ROI low cost items would you pick to get as close as possible to a $30K valuation jump? It can even be one or two items out of all.

I must note that the current tenant utilizes the apartment heavily with 4 kids and are on the messier side. I'd like to balance the immediate ROI out the investment with durability if possible. I'm also open to considering other items you may suggest.

Btw- the last two appraisals rated the overall condition of the house as C3 and C4

1. New Clopay Garage door

2. Pressure wash around the house

3. Paint front door Cherry Red

4. Paint exterior door and windows trims

5. Paint the deck

6. Stainless steel Washer/Dryer + Dishwasher

7. Granite or Quartz countertop

8. Replace old tile with modern backsplash

9. Repaint Kitchen cabinet + get new knobs

10. New carpet or LVP upstairs bedrooms

11. New vanities in bathrooms

12. New shower sliding doors

Hello BP

I’m evaluating a short-sale opportunity in an upscale neighborhood of Montgomery County, Maryland and I wanted to seek your advice given the following facts:

• 1) 5500 sqft 5 bed 6.5 bath SFH, taxed assessed at $2M, with current market value of $1.5M
• 2) This property and 7 of its neighbors are the most expensive properties within a 1 mile radius. The rest of the SFHs in this area range between $900K to $1.2M
• 3) SFH was built 30 years ago and is still in original but decent condition.
• 4) The property is definitely underwater (trying to find out by how much and who the lender is).

Q1) Assuming I’m the only offer and this is an all cash purchase, what is the minimum you’d expect the lender would accept? If this property hits auction, it would sell at around 70% of market price or $1M, and of course lender would incur legal fees, etc associated with the foreclosure process. Is 80%-85% off market price a reasonable range to shoot for?

Q2) In many other high-end neighborhoods of Maryland, homes are selling very fast at about 15% above their tax-assessed values. If that was the case here, it would have been a no-brainier for me to perform a high-end rehab and resell the property. However, in this particular area, homes are either depreciating in value or just never fully recovered from the Crisis. There are only a few comps available for this area but it appears that they have sold at about 15 to 20% under their most recent tax-assessed value. The highest recent sales amount in the area was $1.6M for a very similar property. This concerns me and I feel like performing a full rehab could be a bit risky if there is a price ceiling. What other exit options do I have? Should I do a very light cosmetic touch up and put back on the market without incurring significant rehab cost?

Would appreciate your feedback