85% of the condo has been remoddled, seller says it needs a new kitchen and master bedroom plus eletrical, he says that would be around 50k-70k to completely finish
Says “I have negotiated a short sale price of $425K with the mortgage company that they are willing to take right now so there won’t be a month or two or three to get them to get an offer accepted. It’s ready to go right now. As mentioned it will take up to $75K to finish the project but when it’s done the property should be worth, at least, $600K and probably closer to $625K.”
It’s in a GREAT location downtown Denver and was wondering if this sounds like a good deal to you veterans. My plan would be to offer 400-410k and wholesale to a buyer for around 430-440k. This would be my first deal.
First you realize that Denver is one of the flatest markets in the country, sure investors can make money there but it's a combination of buying right and selling right!
The $600k market is barely moving in Denver, your looking at a property set up to sell to a end owner, for you to buy this and interest an investor on gambling on this type of property you would have to sell it to an investor at about $225k to $250k!!!
First as an investor and especially in that market I have to buy a pristine place for 35% plus purchase and resale closing cost’s below FMV. This would put me pristine at $350k without putting a dollar into rehab, then I would have to deduct your estimate of $70K and ad $30k to it for incidentals, overhead, carrying cost’s and prudent reserve.
Then the number of potential investors able to handle a property at this price is maybe 1 or 2 out of 10 so you severely limit your potential buyers.
This could be a fine deal for me at my price, and you would have to buy it even cheaper to make a buck, but this is no deal for you at $410k, maybe $210k is more like it, but this is a REO and the bank has set this up to take a loss 20% below FMV plus repair cost (Lenders or the Agents Estimate).
Personnally I just dont like condos and dont think they are good investments. They get obselete way too fast, have condo fees that are ridulously high (preventing cash flow profits) and you have no control over the entire building. As for this deal you are going to hit a wall as there are so many people that can afford to play in that price range and not many that can get financing need to close the deal. I would pass unless you know certainly that you have a committed and qualified buyer ready to act
Condominiums ewww! lol. No but seriously if I can’t get a super steel on a condominium on the 16th floor, then I’m walking. These builders sometimes ask for outrageous prices not knowing that we are wholesalers. If you think it in good with the builder himself and you will be likely able to negotiate some under the table negotiations.