About 2 years ago when Miami’s market was booming next door to me a guy started to build his dream home. Hes a contractor and built a huge castle in a very nice neighborhood but the house just does not fit in with the other houses. Its a 2 story 5/4 5000 sq feet where all the other houses are 2000-3000 sq feet 1 story houses. Miami’s market went bad and he is not selling the house. It is not finished and hes asking 3.5 million when its honestly only worth 1.5 million. I want to wholesale the house but i dont know when to act. Theres also some flaws to it. Firsts its brand new, its in the wrong neighborhood and the market is bad. What would you do? Wait a year or act when its finished and explain to him directly that he is going to lose alot of money?
It is very hard to move a home that does not fit. Fl is a big area for that now. I live in ft lauderdale and see if alot but slowly people are building bigger homes certain areas .
I would not try to buy or wholesale this home if it is not completed, that will make it even harder to sell, though you may get a better deal since less money been put into it.
Your better off looking for the odd piece that is completed already. I am actually working on one now. Guy has a home appraising for 2.9mil and I am working on getting under contract for 1.5mil. It was appraised 3times since Oct, last in March so the comps are accurate, but all the appraisers had to make excepts for comps and go as far as 26miles from home to get comps, But this home is truely magnificant. A FL home on 2.5acres where most are 1/4-.5 half and 2500-3500 sq ft. This is 2homes for 10,000 sq ft. build from LimeRock and just incredible.
unless your very experienced, you stay the heck away from this deal. its a white elephant deal; sure some money can be made, but only if you are prepared for a very long hold time and figure that your valuation and/or current valauation could be off by a significant amount. In the end, these kind of properties just bump into a kind of glass ceiling in terms of valuation. They are only worth slight more than the next most expensive “normal” house in the neighborhood.
Well i said i will be wholesaling the property and not buying it so i dont have to worry about that.
Guy wants $3.5m and you want to offer $1.5m, what are the odds that he will go for you bid? Unless he’s really losing his a** I doubt he will even consider it.
Well see thats why i was asking about timing. The house is still being build and has been for 2 years in which the market went bad and he is now not making alot of money as a contractor and was forced to sell the house. The house will sit on the market for at least a year in which he will lose alot of money. He can sell now for 1.5 mil and lose not so much money or he can wait a year and sell for 1.5 mil and lose alot of money. He listed the house a month ago with a realtor and its far from done which tells me hes pretty desperate. He also has a 800k construction mortgage outstanding.
I guess if he only has $800k into it you might be able to make it happen. What is your exit strategy? Who will finish construction?
Well its almost done he just has a small crew and they work slow. I would want to wholesale it finished.
I talked to the realtor which was interesting. She told me that the sq feet of the house is actually 9000 in a neighborhood with houses that are 2000 sq foot average. I explain that the house was not going to sell for 3.5 mil in the wrong neighborhood, no pool and in a market that will continue to go down. She told me she had been doing this for 30 years and knows what she is doing… I guess waiting a year for commission is her thing.