Distressed Property With Structural Damage
I'm looking for anyone's opinion who has experience with an undertaking as big of a project as the one I am looking at doing.....
I have found a distressed property (interior and exterior) with structural damage in an area that has a reputation for landslides and condemned property. However, it is located in a VERY upscale neighborhood with $500,000+ homes on a mountainside above the most desirable area in town. This is a bank owned property that will require stabilization with piering or other 'rock bolting" technique. Property sold in 1996 for $537,000, offered today at $339,900 and I think we can get it for $295,000 or less, but could be worth $750,000 once completed and certified. Anyone have any opinions? Trying to do this with eyes wide open...
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[ Edited by CherylHintz on Date 11/13/2003 ][ Edited by CherylHintz on Date 11/13/2003 ]
It will depend mostly on how much it costs to do the repairs. so how much will it cost to do them? you might want to insure it too. If is is well known that properties in that area are prone to cave-in or that there are land slides in the area that may make it more difficult to sell. keep that in mind.
Josh
[addsig]
Sounds like there is a lot of potential equity in the deal, just make sure you get several bids from contractors for all the work that you're going to have done so that you are absolutely sure you know what you're getting into and that there is still enough equity for you to make a profit. Also on this type of deal you may need to go hard money unless you have your own money, so make sure that cost + repairs is around 65% of the after repaired value because hard money lenders typically won't lend more than that. Good luck.
Now this is something that you can make some money at, however it does require a certain amount of experience and construction skills.
Interesting enough sometimes the Loss Mitigator noh REO will be very helpfull and occasionaly will help with the financing, cus otherwise they just might be suffering a total loss of invested funds.
Best one I ever had, a local S & L foreclosed on an A frame built on a non compacted lot in the Hollywood Hills, seems the person created a lot by just bulldozing out a pad and then erected the A. Frame. It was suposed to be on cassions and properly engineered.
It started to change zip codes and the REO called me. I looked at it, dug around, found that the so called cassions only went down about two feet and were still in the overburden instead of the required minimum of at least 8 feet.
They sold it to me with no downpayment and increased the first trust deed loan by about double to give me funds and away I went.
Jacked it up and redug for the cassions down about 20 feet, dug by hand, bucket by bucket. Laced in the steel no 6's tied with no 3's and poured it at 3500 psi. I also beveled the bottoms. So now everything is fine and god loves everybody.
Ok thats the example. go look, if you do not know enough get someone that does, not just an engineer but someone who has done it before. Big difference between writing about this stuff and doing it. Come up with a solution, have the soil engineer meet you on site, you dig the holes for the soil engineer. Get an opinion, write up the corrections, set up the financing. go to permit and do it. At the end of the trip you will have created something worth while and it will have been fun, and profitable....
That is if you are into dirt and lots of work.
Should have seen the soil engineer. At the end of the digging he had to go down the hole to inspect the bottom. So we tied a rope around his feet and dropped him in. Had a little light on his hard hat.
The bottom was sound on all six holes so up he came. I thought he was going to pass out. Before he went down I offered to teach him Chinese cause he was going so far down. For some strange reason he was not amused. Took almost a half a bottle of Scotch to get him back to reality. He did agree that it was good training for the hereafter. Amen.
Da Grunt Lucius
Lufos, is there anything that man hasn't done (and can still be posted via the internet)???? That's why he's my fearless leader and mentor.