Wednesday, April 27, 2011
JUST SOLD! Diamond In The Rough
I just sold this REO home to an investor. I will be consulting with him to assist in restoring, rehabilitating, and reselling the property. This home has all the great features you want in a historic property from 1908: 12 foot ceilings, original casing and moldings, hardwood floors and more. It also has all the features you don't want in a home: gnarly and inefficient electrical, lots of urine stains and odor, a bad roof, no bathroom, and other oddities.
We anticipate the fix-up process will take 60 days or so.
The property came on the market at $45,900 and I worked with a friend and neighbor (who happens to live in this home I restored just two doors from this property) to purchase this house as a fix-up rental. We had trouble finding hard money lenders who would lend against this home and, ultimately, we disengaged from trying to purchase it. I then discussed this property with one of my investor-clients who was looking for a project and we placed a cash offer at $40,000. The bank countered us at $45,000, we countered back at $40,000, they then countered us at $43,000, we countered back at $40,000 again. The bank finally capitulated except with a 7 day inspection period which we begrudgingly agreed to. Our inspections found quite a few boogie men in the home so on the last day of our due diligence deadline we asked for a $5,000 reduction to $35,000. The seller took three days and countered us back at $37,500 the day before our settlement deadline. We agreed and closed today. We were able to purchase this dead-on-arrival home for 19% off list price. The anticipated rehab budget is $30,000.