The house is currently owner-occupied. The rent rate of $1,000/wk is what the agent told me (and he does vacation rental management in the area.) Prior to contacting him I did my own research on rentals in the area and estimated the rent rate would be $1000-$1500/wk. So his ‘suggestion’ falls right in line with my findings. I also know the area somewhat, and know that it is a very active vacation area.
I do have the patience, but I don’t have the knowledge. However my dad was in construction (and in fact built 2 of his own houses) and I know other people that have done various renovations and repairs.
I don’t know what the fixup cost will be. I haven’t seen the house (it is a 2+ hour drive.) I was thinking about making two offers, one low all-cash and one high all-finance, both subject to my inspection. That way I can see if they are willing to bite before wasting 4 hours commute.
You’re right. I realized after I posted that I should make a low all-cash offer anyway, and see which way they’re more inclined to go. Of course I might make the offer and get nothing, but I plan to make similiar ‘double-offers’ on other property in the area, and if I get some interest, THEN I’ll drive there and look at all of them.
I stumbled across this property on the Canadian MLS website, and after speaking briefly with the agent and reviewing the feature sheet, I have learned some interesting things (both good and bad.)
Here’s the rundown:
Asking: $229,000
Present state value approx. $190,000-$200,000
It’s in BAD shape, needs a lot of work, water damage, unfinished areas, you name it.
That’s the bad, here’s the good:
Owned free and clear.
On the market for over a year with no offers (not surprising after reading the above!)
Owner wants to move back to Europe. (actually they wanted to move last year already)
PRIME vacation rental area on the southern shores of Georgian Bay with 46ft of waterfront by 345ft deep lot, also just a few short miles from Blue Mountain.
Approx. rental $1,000/week (summer and winter)
Intrawest has recently bought 50% interest in Blue Mountain along with 100% of future base development, they plan to pour millions of dollars into the area over the next few years. We all know what happened when they did this with Mont Tremblant in Quebec.
There is currently a shortage of rental property in the area, and it’s getting worse.
I don’t have any solid figures for current or fixed-up value, fixup costs or expenses.
The reason they’re selling as mentioned above is ‘moving out of country’ and the reason for the price is personal sentiment, it’s got little to do with true worth.
So what I was thinking (and please give me your thoughts): I could explain that I’d need to get a fixup loan or investors and so the only way I could afford it is for them to give me a deep discount or carry low-cost financing.
By their current asking price I’d think a 30%+ discount is unlikely, so no or low interest financing would be the only way to make this work, wouldn’t it?