Posted by Nicki on November 11, 2010 at 08:16:38:
Hi there, Bill. Yup, I’ve decided to pass on this one. I may revisit the idea in the future. Thanks for your response.
Details of Meeting with Homeowner - Posted by Nicki
Posted by Nicki on October 26, 2010 at 24:18:21:
Well, the meeting was a 2.5 hour dialogue. It was quite strange and rewarding, although I hadn’t gotten any of the properties under contract. My guess is that the woman is semi-motivated. The one property I checked out today needs between $50K-$60K worth of repairs. The lower end comps I received from my agent are between $10K and $40K. Now, the 1st floor of the property, which was once a store, is pretty much gutted. The 2nd floor is a 2 bed/1 bath apartment. Someone had begun remodeling the place to make it a 2 family unit, hence turning the store part into a residential unit, about a year ago. Unfortunately, the place was left in shambles because the guy who was remodeling passed away. The owner says she needs at least $25K so that she can catch up on bills associated with the other 3 properties and her husband’s passing. She told me that the taxes are current on this property I’m discussing. Her other properties include a store and two very huge homes. After her husband died last spring, she said that she’s been struggling with finances. There are no mortgages on any of her properties, and she terminated insurance and turned the water off for the property I was interested in.
I know this is a long post. I just wanna include all the details that may be of importance.
Any advice on what my next step should be, or should I market this property, the one that the owner wants $25K for, to see if I can get a buyer to take it off my hands for $30K?
Please let me know if I should move on to the next or try to make this work.
Thanks!
Re: Details of Meeting with Homeowner - Posted by Bill Jacobsen
Posted by Bill Jacobsen on October 30, 2010 at 12:48:16:
It is difficult to answer without knowing your experience level. It is an unusual property. What is the closest thing to this property you have ever done?
First, what some agent thinks this property is worth in current condition is of no importance. The question is what is it worth to you. This will depend on the after repair value and your need for profit. The after repair value will depend on the rents that can be generated. You also should consider leaving this as a commercial property and what that would be worth.
I also consider this property to be high risk since you are changing the use and putting a high amount of money into the property. When doing more than cometic rehabs you are likely to identify additional problems once you get started.
If this is your first property, I would pass. Just my opinion.
Bill