All Forum Posts by: Shem Varhaftik

Quote from @Kyle Weinapple:

Hey BP, I am stuck in a situation where i have rental property in Baltimore city and it is a money pit. The good thing is that its at at 2.875% interest rate. I have owned it for 4 years now and have put a good amount of money into it already but with the condition that it is in now, it probably needs another $30,000-$35,000 put into it. I have enough in savings to pay for it but I keep asking myself should i just sell it and get it off my plate and lose the low interest rate or bite the bullet and do a big rehab and continue renting it out. I know the solution can really depend on the individuals situation but any opinions or ideas are appreciated! thank you BP!

If you decide to pull the trigger and sell this property I would be interested in a potential sub2 deal. May be able to get you a decent chunk of money and market it to my network of investors who would absolutely love that interest rate.

I'm about to go under contract on a home zoned as R-8, which according to Redfin is classified as residential multifamily. It states that both commercial and multifamily uses are permitted. However, the seller claims he purchased the property as a two-unit dwelling based on Baltimore City public records, yet it’s not legally permitted as such. The GIS map designates it as a single-family dwelling, but the property is clearly set up as two units, with separate HVAC, electrical systems, etc.

My main question is: Would it be possible to obtain a permit to legally convert it into a two-unit property? Many homes on the same street are multifamily, and this property is optimized for a two-unit setup. If it’s feasible, how long might the process take, and what costs could I expect for the necessary permits? I believe I can demonstrate that the property was originally used as a two-unit dwelling, which could strengthen my case.

I want to ensure this deal is still viable and that securing the proper permits is realistic, as my financial projections are based on this being a multifamily property.

Its majority single family with some multifamily around, you could totally build another unit as well. 

Quote from @Nathan Gesner:

Quote from @Shem Varhaftik:

I made an offer on a property today, but unfortunately, it was not accepted. I informed the seller that I would do my due diligence to see if I could get closer to their asking price. I wasn't unprepared—I had a clear idea of my MAO, ARV, and estimated repair costs. However, the condition of the property was much worse than anticipated, which prevented me from further negotiations.

I have a rough estimate of the necessary repairs, but the challenge is that an investor might see this as either a full gut renovation or a moderately heavy project. This is a single-family home in a commercial and multifamily zone, so I believe that if the right investor obtained this property, it could be acquired at a higher price due to its potential for significantly higher cash flow.

I'm wondering if I can increase my asking price because of the property's zoning potential. If so, how can I attract the right buyer?

Are you wanting to flip this property?

You can't seem to justify the current asking price, so how are you going to convince another buyer that it's worth more based on zoning? I agree that's possible, but it appears to be priced at maximum value. I don't see where you can squeeze anything more out of it.

 Im wanting to get it UC and assign it to an investor who would flip it. 

I made an offer on a property today, but unfortunately, it was not accepted. I informed the seller that I would do my due diligence to see if I could get closer to their asking price. I wasn't unprepared—I had a clear idea of my MAO, ARV, and estimated repair costs. However, the condition of the property was much worse than anticipated, which prevented me from further negotiations.

I have a rough estimate of the necessary repairs, but the challenge is that an investor might see this as either a full gut renovation or a moderately heavy project. This is a single-family home in a commercial and multifamily zone, so I believe that if the right investor obtained this property, it could be acquired at a higher price due to its potential for significantly higher cash flow.

I'm wondering if I can increase my asking price because of the property's zoning potential. If so, how can I attract the right buyer?