4000 sq ft home in a very high end are of central Ohio
5 bedrooms, 5 full baths, 2 1/2 baths, 3 car garage
purchased in 2002 for $860K
had a fire in the garage and smoke damage to the first level
owner received money from the insurance co and has begun repairs but is interesting in selling as-is since he has since found new home his family is interested in purchasing
repairs left to do:
complete the kitchen (cabinets, appliances)
complete the sheetrock for the 1st floor
all trim/crownmolding first floor
paint second level
stain and poly all the floors which are hardwood (have been sanded)
replace 3 garage doors and sheetrock the garage
appraisal ARV is $980k
estimated to finish work needed $100-$120k
available to purchase as-is at $675k
so - in summary
buy $675k
repair $120k
----------------
$800k
sell $980k
----------------
profit $180k (not including carrying costs and fees)
comps in the area = averge days on market 119
average price of homes $1.05m
sounds like a winner but I am very new to high end homes and wonder
how hard it is to sell a million dollar home in todays market???
Is the title marketable with a $675,000 purchase price or is the seller paying the difference from the insurance proceeds? It sounds like there is more to this story. The house could be repaired and sold without the owner putting an ounce of energy into the repairs. The insurance company would pay and have it completed by others. Was he not insured properly and now he’s facing a problem of finding the money?
I’m not experienced in this arena but would consider the economy in the Columbus area. Are there big corporations moving in/out, medical facilities in/out (basically, evaluate your potential buyers lifestyle and see if there would be demand). Also, what are your thoughts on future interest rates as they would have a big impact on a sales price in the $1mm range. Can you afford the large carrying costs to ride out a slow market? Why don’t you just move into the house, fix it, and sell it at the best opportunity?!?!
I’m in Cleveland (the poorest city in America) = Little supply of expensive homes/people to buy them.
The title is marketable and the home has passed its plumbing and electrical inspections so sheetrock work can begin. It then needs to have an architectural review and the occupancy permit.
THe owner bought the house in 2002 and has only $350k mortgage left on it after a large down payment and accelerating his mortgage payments. He is not in financial stress by any means. He is just interested in another home he has come across while waiting an entire year to receive the insurance proceeds to begin the repairs.
The market for this kind of home, as I would suspect, is not really affected by interest rates. Buyers in this price range are not squeezing into a home of this price because of low interest rates. My honest opinion is that the $400-600k market is where buyers are lacking because that is where buyers are trying to get as much home as they can with not such a high family income.
Carrying costs would be $6k per month.
I dont have a plan “B” which is my concern. I cant rent this house if it doesnt sell and I do not want to live in the home.