Re: Financing suggestions please - Posted by John
Posted by John on May 21, 2000 at 22:45:05:
Ok, I’ll try to fill in some more blanks.
“You’ve told us nothing about yourself or qualifications. How would we know,
what your financial situation is?”
I buy houses that are generally one city council meeting away from being condemned and torn down. I then rehab the entire structure top to bottom. When completed I rent the place or sell it. If renting, I mortgage the property to recoup my money. I’ve only done a few, so my rapore with a bank is still limited. Also, when I do mortgage a property, I go the no income verification, no doc approach (for reasons that only I know).
“Is it 50% complete, 70% complete, what ever, that’s the first piece of information
Perhaps 35, maybe 40% completed. The foundation is there, the exterior framing and sheathing is on, doors, windows, roofing. The interior is studded, but thats about it.
“What do you think it will be worth when it’s complete?”
In excess of $300,000
“How motivated is the seller?”
Real motivated since the last I heard the city within the past week was issuing a final notice to do something with it or it will be torn down. If torn down they’ll have a vacant lot with a lien on it. I would think its to their advantage to get rid of it quickly.
“How much do you think you could buy it for?”
Less than $40,000 (no kidding). The lender has asked two agents to try and arrive at a figure for it. The agents say they can’t and that it should just go to an open bid. From what I’ve been told (by very reliable sources) the highest bids being tossed around right now are in the upper 20s. No joke…!
“How much do you think it’s going to cost to finish it?”
Conservatively, $50,000. Realistically, $75,000
Then the next question is how does this house or property conform to the area?
Meaning does the value of this property conform with other housing around it,
or are is it over built for the area?”
This is a secluded subdivision where all of the building has already been done. There are two lots left to build on out of perhaps 40 available when it was started. The land is locked in by water, no more building in the area. And all of the houses in the area are worth 280 to $350,000.