I don’t know about the southern California market but in areas like Arizona, Las Vegas NV, Denver CO the condo market is very soft and depreciating. For a note to even be considered you must have a strong credit buyer, 80% or less LTV, 8% - 9% interest and no balloon payment shorter than seven years then you can expect about 90 cents on a dollar so you better be buying at a big discount. The only thing worse than condos is mobile homes without ground.
Hello
A friend of mine has been looking at a condo/loft development here in So Cal for about a year. She liked 1 unit in the complex that happens to be 2700+ Sq Ft. The building was originally built as an office building in the 1930’s. The builder has done a great job of modernizing but kept the original feel of the building using the existing marble pillers and floors that are throughout the complex. When she told me that the unit that she wanted had dropped in price by 150K, I wondered why. But I suggested that instead of buying one unit, let’s do some research and but the remaining 20 units that the builder has left. She thought I was crazy but here’s my idea.
If everything checks out and we could get a good enough deal, we could market them and I suggested carrying all of the notes ourselves. I told her that we could write the notes so that they would be profitable and marketable to sell them if we needed. But make them affordable for the buyers so we wouldn’t set them up for foreclosure. They are in a popular area within a few miles of the ocean.
I’ve taken Robert Allens course but have yet to do a deal. My friend has good credit but if we’re going to negotiate a deal with the builders that hopefully make good sense, we need an investor’s help. I have only seen photos of the place. Sorry for the long letter but what are your thoughts and suggestions.