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. 


Anonymous said...

NO bathroom? How is that possible and the building not condemned? And do I really want to know the answer to that question?

Jeremy Peterson said...

As you can see in the photo with the checker tiles, the bathroom was "removed" by the previous occupant. There used to be a clawfoot tub there. Note: When this home was built originally, it had an outhouse. Indoor plumbing was added sometime in the 1915-1920 period along with an addition to the home.

Robert Wayne said...

good work!