Posted by Randy on September 20, 2003 at 08:37:11:
Make an offer? I wouldn?t expect the Realtor or the builder to accept but you can certainly make an offer. The challenges you face are multiple, first the Realtor only gets paid when the property sells so unless you?re prepared to pay the 6% realtor commissions up front upon acceptance of your L/O the realtor won?t take you seriously.
Secondly the builder is probably operating on a construction loan at around 10% that allows him to buy materials and pay his crew salaries; he gets paid his profit when the home sells-the homeowner gets a mortgage, pay?s off the underlying construction loan and builder profit?s. So unless you can cash flow it at this high cost of money and he can wait for his profit?. With the current state of ?cheap money? for homebuyers I?m pretty sure that?s why he chose to build the other two now.
The third challenge is your expatiation to buy at 65% LTV. Typically there?s not that much in the deal for the builder, 10%-20% of the selling price is more realistic for builder profits. I doubt he?s willing to ?Give Away? all his profits before trying to market it retail. I my opinion the time to have done this was on the one that stood empty for a year? just before it sold retail ? that ship has sailed.
Posted by L.M.-GA on September 20, 2003 at 24:40:29:
Need some help to see if my creative thoughts can be turned into a creative solution or is it a pipe dream…
My subdivision was developed over a period of 15 years… my area was the last 6 yrs ago except for three lots… a builder finally put a house on one of the lots (2002) and it sat empty for over a year, it finally sold this past June and since then the builder started building the last two houses. One is 3/4 finished, they just started the foundation work on the other. Realtor already has signs in the front yards.
I’m think great L/O opportunity…But, L/O is not my niche. I’d rather wholesale or assign the properties to another investor to L/O or…
Now is this idea a possibility with this being new construction? If so, how do I get the attention of potiental investors, since most are going for the ugly and foreclosures?
Also, what the best approach on the numbers for this…Ask Price x 65% - fees = offer? FVM on the neigbors house, which is 6 yrs older, is 169K by the county records. The house that sat empty for a year started out being listed at 199K but I seriously doubt he got that price. There’s two houses, so better to negotate for both (?)…hopefully.
OKay, so my I somewhere in the field of something creative or crazy?
Thanks for your input, ideas, suggestions!