Re: high fianance on luxury home, Ed can you help? - Posted by JohnBoy
Posted by JohnBoy on February 11, 2001 at 16:11:17:
I seriously doubt that you would find a buyer to pay full market value for this property, especially in 60 - 90 days! Homes in this price bracket sell well below market value all the time. Paying $3M on a $4m property isn’t uncommon. That’s usually what it takes just to get the thing sold!
Think about it. If YOU had this kind of money to spend on home like this, would YOU buy one that was designed and built for someone else, OR, would YOU rather have your home custom built to your specifications??? That’s a LOT of money to just pluck down on someone elses dream home! In order to get this thing sold you will need to offer it well below market value. The only thing you would have going in your favor to unload something like this will be LUCK! You just happened to be in the right place at the right time, where the right buyer just happened along while you had the thing tied up and they just absolutely WANTED this house! In this price bracket with the number buyers qualified to buy a home like this, how realistic will that be??? It will all boil down to getting LUCKY! So you will be risking the marketing costs involved in hopes of getting lucky with finding a buyer. My guess is that you would get better odds at the crap table in vegas on one roll of the dice shooting for box cars at 30 to 1. That’s just my opinion.
Also, what is it with creating a note to sell at closing to get this deal financed??? Trust me! If you can find someone that can afford to buy a home in this price bracket, selling a note at closing will be the least of your problem. If you could find a note buyer willing to buy the note at closing on this, then the buyer could probably walk into just about any bank and get their own financing! Just because you want to sell a note at closing doesn’t make getting the buyer financed any easier. In fact, in most cases it will be harder and a lot more hoops to jump through than just getting a loan through a bank!
If you were to get this property for $2.5M, then think in terms of dumping it for $2.7M - $3m just to get a fast sale and walk away with a few hundred grand for your troubles! Your talking about flipping a high end property for retail! That means offer it well below market value just to attract a retail buyer and let then know they are getting a deal on this to help them decide this is a good deal for them!
Also remember, you stated before the seller has been trying now for three months to sell this. You can be sure this seller has plenty of contacts with people in the income brackets that could afford a home like this and has already tried to find someone in his area that could afford this, especiall being located on a country club! This means you will probably need to advertise this thing in major papers in major cities across the country to lure a buyer in for this. Being located on a country club in AZ. would be an advantage for doing this to attract high income players in other cities looking for something like this in a nice climate like AZ. But to advertise it in all the major cities will cost some dough! You could try the USA Today that is a national publication.
All in all, just remember, you’re betting on the come here to get a buyer in this price bracket and with those being far and few between, your gambling with your advertising costs hoping to get LUCKY and risking your dollars to pull it off! If you can afford the gamble to take a shot at this to reap the reward of possibly making a few hundred thou., then go for it!