I have two deals next door to each other. 1 home is about to foreclose in two weeks. The other wants cash so he can move to a retirement home.
Is .70 on the dollar a fair offer in a neighborhood with 1.5mil homes. This neighborhood has lots of tear down homes and many upscale homes being built. I am working with a builder and will likely rezone and tear down the two houses to build 3 homes. What is the best way to raise financing for a project this size?
I also could use a workseet or an offer letter if someone has a sample and willing to share. Also could use a Purchase Agreement…Thanks for your help!
By reading your post it sounds to me that you have alot more homework to do if you don’t even have your hands on a purchase agreement, offer letter or a worksheet and you’re looking at tearing down 2 houses to build 3. Good luck with that!
Sounds to me your building a house of cards instead, in other words, your putting the cart before the horse IMO.
I’d do ALOT more research, ask ALOT more questions and plan on spending ALOT more money than you expect if you’re going to proceed with your “deal” like your post suggests.
I’m not worried about the process as I have done a ton of research. If I can get the sellers to settle at 20% below market I believe this will be a slam dunk. Does anyone know where to find lenders with larger amounts to loan. Any suggestions in these specific areas?
I am looking for professional people that can help cause a great deal with lots of potential. Anyone else have more positive suggestions?
how familiar are you with “rezoning” things…
do you mean, you’re going to buy the two properties and subdivide these lots into three single and seperate lots?
if so, you’re talking expensive surveys, arhitects/engineers for plans, building approvals then building permits, hiring and managing your subs, etc…
in order to get the financing for something like this - you’d have to have ALL THIS worked out ahead of time.
you wouldn’t necessarily need the building approvals etc…but you’d need to have everything else in place and lined up and also you’d need a pretty good idea of how easy/difficult it will be to subdivide these lots.
you’ll also need to get input on any utilities for the structures and if there are sidewalks - you’ll need something like a “highway” approval - to have town okay and put in your sidewalks.
your biggest challenge will be conformity. in fact, i’d probably start there - see how the frontages work out in comparison to the surrounding houses (any property within 500ft) - you can get this from the town most likely. all this also depends on how strict the municipality is where the lots are located…
Thanks for the info. I checked witht he county this morning and a sub-divide will not work. The lots need 75’ frontage for all 3 properties and this scenario is 25’ short of that.
I will proceed with building two instead of three, which means it will be important to purchase the properties at a slightly more aggressive price.
Any suggestions on the best way to approach sellers to get a fair , but lowest possible price. I plan to work from the bottom up…what is their current mortgage, any liens, arrears, and how much cash they want to walk with.
Does anyone know private lenders in the DC, MD, VA area interested in backing spec homes?
why are you so drawn to these particular properties?
Each deal would yield approx $250k profit.
so you’re planning on knocking down what’s their - maybe leaving up a wall or two to avoid new construction permits or something like this - and building 5000 sq ft homes, marble floors, hot tubs, pools etc…?
i mean if you’ve got 1.5m homes in the area - i guess that’s where you’re going with this.
sounds interesting. have you done this before?
That is basically what we are doing. The comps in the area for tear downs are 7ook and the post construction resale on 4,000sf (above ground) homes is 1.7mil.
We are seeking investors at this point…we have one in miond, but seeking backup plans, so that we can make an offer. Anyone have any leads?
I am working with a builder who has 25 years experience building and renovating homes like this, and now we are venturing into rehabs and ground up resale.
Any reputable investors with available credit and funding, please contact me…