I Found An Old Hospital Built In 1896
I am planning on making an offer on a very old (built 1896) hospital. This place is in desperate need of repair. The main problem is the roof and the wiring needs to be upgraded. I have people who can do this. Anyhow, I am trying to figure out the best and most likely way to convince the owner to sell to me.
He lives out of state and only bought in last December. He had planned to move to the area and fix it up. His plans have since changed and he does not know what he wants to do with it.
It was listed for $170,000- at the time he purchased it for $110,000-. He basically bought it for the worth of the property. It has a beautiful unobstucted salt water.
view.
I am considering turning this into a rooming house. There are 10 rooms that can be converted into bedrooms. This place is nearby the college.
Here are some options that I have considered.
1) Lease Option with seller financing at the end of two years.
2) Partnering up with the owner and doing the repair work for part ownership. I do not know this man so this is a concern.
3) Offering him $130,000- ($20,000- more than he purchased it for) using an owner contact. This place is not bank financible.
4) Bringing in another partner with good credit to help finance the place using a construction loan. (My credit is not bad, but not good) I have a contractor and other people who do work for me.
Any other ideas I have not thought of? I want to get this place with the least amount of money possible. The owner sounds like he is willing to listen to an offer. I want the offer to be one that he likes right from the get-go and that will be good for me as well.
Thanks for your input.
Debbie
Debbie,
You have come up with some good idea that seem to reflect both the seller and the limits of the property's condition.
I would start by having a conversation with the seller to find out what his motivation is. What happens if he does not sell? Can he just let it sit? Does he need his money back for some other project where he can make a profit (if so then he might be less concerned about a profit on this one).
If he can let it sit, then propose that he do more then that. He lets you work on it with either an option or seller financing.
If he needs the cash out to get to another project then see how low he will go (maybe even lower then the purchase price).
You could offer him an option to buy it back at some later date if he gives you a really good price now. Sharing a bit of the profits while gaining control in the short run for no money.
John
[addsig]