Re: Making an offer on Mobile with land - Posted by Daphne Lowe
Posted by Daphne Lowe on April 09, 2006 at 22:42:29:
It sounds like a decent deal with regard to price. I?m assuming you?re doing this as a land play (it?s long past buying in the Keys for cash flow). A lot of properties here have no (or very small) mortgages, so if the owner has no use for the cash (likely since they?re doing owner finance) an equity share may be attractive in lieu of a large down payment. ie. 10% down and 25% share of the future appreciation to be cashed out at some defined future date (whether by sale or appraisal and refi).
If your plan is to use the home for vacation rentals, be advised that many areas in the Keys have restrictions on that activity. Even in situations that are grandfathered, it?s tough to do better than breakeven (hard for investors to compete against homeowners who are happy to shave off just some of the cost of a 2nd home they would otherwise own anyway), especially on homes with that don?t have something going for it like a pool, control depth, KW location, oceanfront, etc. At that low price, you’re scraping the bottom of the barrel, I’m guessing you?re looking at a 70s-80s 2/1 SW on a dry lot in Largo. That?s not bad, after all, it could appreciate enough to warrant teardown 18 months from now and you could clear $75k for your efforts. That?s been going on for years, and very few folks have gotten burned. Of course that doesn?t mean it won?t happen in the future.