Pretty House, first one... Couple of questions - Posted by Sean

Posted by Sean on October 20, 2003 at 10:18:24:


Thanks for the feedback, I have no doubt there are buyers… obviously there are buyers, or builders wouldn’t be building the things… My concern is that buyers that have the cash and are in this price range are more likely to have the credit as well and more likely to go down the street to buy one being built than lease purchase this one.

In the lower areas I work finding people with the money but poor credit, or decent credit and little money isn’t all that much of a problem. Just trying to guage if this is true in these higher ones too…seems to me more buyers will have money and credit that are looking at these types of homes.

Or basically is it tougher to find good T/B in this neighborhood of house. Or is my concern that most in this range just don’t need that lease purchase benefit and not willing to pay a premium for it, and will just go down the street to the builder and buy new.

Pretty House, first one… Couple of questions - Posted by Sean

Posted by Sean on October 19, 2003 at 22:40:08:

Ok, so I’ve been rehabbing junkers for a while now, and have gotten it down to a system… really haven’t been marketing to get leads as REO’s etc are more than plentiful enough for me to quickly acquire whenever I am ready for the next one in.

So anyway, put up a web site, advertising my properties and soliciting sellers. And its been getting good response from the public. Anyway today I got my first pretty house lead, House seller says is worth about 350k they are into it for ~320k are asking ~330, but say they would accept selling for outstanding mrtg. They say no to owner financing at least on web site questionaire.

So, they look like a possible Sub2 or straight option, and frankly possibly a L/O since they admit they are being relocated, built the house just a year ago… I’ll know more when I talk to them tommorrow.

The question I have is, simply are the pretty housers in the area able to realistically attract buyers with good sizable deposits easily? Been able to find buyers in my junker/retail range of 60-80s with 3-5k without too much trouble… just curious if finding the people with 15-25k for at 360k property is going to be more difficult etc. I know the neighborhood is good, and I don’t doubt the house can sell for 350-360k… my only concern is getting a T/B with acceptable down payment fast enough, sure don’t want to eat a 1800+ payment every month.

Thanks in advance.

Real estate is local… - Posted by randyOH

Posted by randyOH on October 20, 2003 at 11:07:58:

I think you would have a better chance of getting something useful if you would tell us where you are located. If you are afraid to tell us the city, then at least give the state.

The kind of question you are asking is very location specific. What is working in one area today may not be working at all in another area.

Get it Under Contract and Market it? - Posted by Randy (SD)

Posted by Randy (SD) on October 20, 2003 at 10:39:37:

As I read your post it appears you?re looking for assurances from others in different states, different markets and different skill levels to tell you it?s OK to go for this deal. NO ONE can do that! The only way for you to find the answer to your question is to get it under contract and try. If there are builders building these types of properties, and buyers buying them, then you should be successful if you can offer something the competition can?t or won?t. An offer to purchase subject to finding a suitable tenant buyer or some other escape clause is the only way you will find out. If you?re concerned about your success make it a Non exclusive offer, allowing the seller to continue to market the property if your not successful?write it up!

Re: Pretty House, first one… Couple of questions - Posted by Stewart

Posted by Stewart on October 19, 2003 at 23:33:35:

This is no deal if the house is really worth what he says it is. Does he realize what he would have to pay a Realtor to list this house? Is his payment in fact only $1800? Is everything else paid up and house needs nothing? How long does it take to normally sell a house like his? You should be covered for a few payments in the deal. Will the area support the lease payment you need. Others will need more info. If you don’t have the cash to cover this place better to back away. Get him to pay next several payments and pay you some money and it might be a deal.

Re: Get it Under Contract and Market it? - Posted by Sean

Posted by Sean on October 20, 2003 at 13:33:58:

I am not looking for an OK on this deal, I am just asking a relatively general question, that I am hoping will be answered by someone with some experience in the custom home/high end pretty house business.

I am in Pittsburgh, PA, not trying to be secretive, or withhold information. I am simply curious if people playing with the custom pretty (higher end) homes are able to get top dollar for T/B’s where new and similiar construction is still going on.

I have no issues in my junker/retail finding T/B’s willing to pay premium to get into my houses, ie finding those people with money, or credit, but rarely both that want to own a home.

However this scale of house in my area, is a pretty prime piece of property in a very prime area. New custom construction is being built today on the same street for just a few dollars more than this guy has a mortgage on it for. I am just curious if those who are active in this market if they have any issues getting top dollar for one of these homes, when brand new can be had down the street. For me to make a deal like this one work for me, I’d be looking at an ultimate retail price of somewhere in the 350ish +/- range… when new construction on the same street in fact right next door is still going on and is in the 330 range. Now obviously in the higher end, prices are all over the map, there are homes in the 420 range as well close by… I am just curious if the clientele for this type of home are going to be just as willing to pay a premium for a Lease to Own as buyers in the more modest homes… or are they more likely to just go down the block to buy new, making it difficult to find the “motivated buyer” for lack of a better term that needs, appreciates, and has a big enough down payment for the home I have.

My junker/retail I often have buyers lining up, I don’t want to find myself with overexpectations that’s all.

Re: Pretty House, first one… Couple of questions - Posted by Sean

Posted by Sean on October 20, 2003 at 06:59:24:

Well don’t worry if I do take it over, he’d be making at least 3 payments after I take posession… I wouldn’t take it otherwise.

Rent should support the payment. House is brand new, 1 year old, needs nothing.

This price house is typical higher end of new construction by non custom builders in this area. 350k new construction hosue house here is 3000+/- sq ft not including basement.

I am just curious if anyone is having issue with finding buyers with down payments for these types of properties. I am getting little resistance in the lower stuff I have been doing, getting the 3-5% down but just not sure about the higher end.

Re: Pretty House, first one… Couple of questions - Posted by luke-NC

Posted by luke-NC on October 20, 2003 at 07:32:31:

I would get at east 3-5 payments paid by seller after the they vacated the premises.

There are buyers for these homes in this range. However, for something this big, you’ll need to cover yourself.