Posted by csmith atl on May 16, 2000 at 23:00:33:
Leveling (if it’s the house) could be extremely costly
depending on the amount of settling. If it’s just leveling the lot(land) then it shouldn’t be too expensive. Definitly get a contractors opinion.
Question for rehabbers - Posted by Ferguson
Posted by Ferguson on May 14, 2000 at 23:57:15:
There’s a property here in austin, tx, that’s been advertised for a couple of weeks in the paper. They want 13,500 down (5%) seller financing. 2 duplexes + vacant lot. rents = 3000, note payment 2525. They say it needs leveling, ‘and other repairs’. For some reason, they’re trying to entice people with the down payment (adjusted down already from 18k), but don’t seem to be budging on the price.
Question(s): What does ‘leveling’ entail? What would motivate them to stick to their price (which represents a rather rediculous cap rate of 7.8% assuming %40 expense ratio), instead of selling off the vacant lot to pay for the necessary repairs?
I understand that the cap rate is a little better within the context of paying off the non-income producing vacant lot, but it still doesn’t seem attractive…
Any hints, tips, or war stories with rehab properties would be helpful… I’m just starting out.
Re: Question for rehabbers - Posted by Paul_NY
Posted by Paul_NY on May 15, 2000 at 02:18:56:
Ferguson,
Without knowing for sure what the sellers means, I’ll say that ‘leveling’ means the house needs to be correctly situated upon the foundation. In other words, there is foundation problems. This can be an expensive project.
I suggest you bring a contractor with foundation repair experience to the building(s) and let him give you a quote for the repairs.
Seller financing usually allows you to get your asking price therefore no compromise on price. They may already be working with a notebuyer.