2 properties on one lot in Santa Ana, CA

10 Replies

I have an owner that has two 2/1 SFRs owned free and clear that he is "considering selling". This is in Santa Ana, California. In our first conversation, he said he would take $450K for both if we could close fast. The comps are $350K each. My concern is that he doesn't HAVE to sell but just is looking for some "fast cash". I plan on digging a bit more tomorrow when we have our second call. He only paid $56k for them back in the early 90s. I already had the title checked and he is the only owner. Any suggestions from the BP fam out there?

I am a little unclear on what the question is here.

I would check prices of duplexes and 2/1 SFRs that are within 20% sq/ft +/- and try to find a happy median. I'm willing to pay more for 2 SFRs on a lot than a duplex because I can get higher rents, but I'm not paying the price of 2 individual SFRs on their own lots. 

Are they one behind the other?

How is parking?

All separate utilities?

Is it on title as 2 separate buildings? Don't be buying a well done, but us permitted garage conversion.

What are the rents?

Leases or M2M?

How long have the tenants been there?

I've purchased quite a few 2 on a lot deals - 2 last year which I still control. They make good rentals. Try to figure out his motivation for selling. It will help you come up with a price that works for him and your bottom line.

Oh, and what he paid is irrelevant. 

@Aaron Mazzrillo 1 detached garage, 1 attached carport. 

I'm checking the layout today.

Tenant occupied "for years".

Where do I check to see if both are legal construction?  Title only shows one on that parcel.

He says he just wants some quick cash. (Not a need to, or have to sell situation)

I know what he paid is irrelevant, just amazed at how much prices have gone up.

Account Closed I just did a drive by and the houses are one behind the other. The back house has the detached garage. I also noticed there is a boarded up foreclosure directly behind the property. Comps in the area were 268-356K but there is a wide range of housing types. Some were nice and well kept but the vast majority were run down and overgrown. He just threw out 450K for the price but admitted he had no idea. We will see how it goes.

Here is the update. They always say that you need to get a seller that either HAS to or NEEDS to sell. This is not necessarily the case with this property. The owner has several investment properties and just wanted info on what I thought he could get. While I was disappointed, I am eager to learn from disappointments. I am putting together a nice PDF report on comps in his area in the hopes that he will want to work together when he IS MOTIVATED. I always want to provide value and this gentleman was very appreciative. This is a relationship business and I look forward to assisting him in any way I can. I look at the experience as just that, experience. It will enable me to help the next person that is in dire need of my services. I love real estate and helping people solve financial challenges!

Originally posted by @Account Closed :

I am putting together a nice PDF report on comps in his area in the hopes that he will want to work together when he IS MOTIVATED. I always want to provide value and this gentleman was very appreciative. This is a relationship business and I look forward to assisting him in any way I can. I look at the experience as just that, experience. It will enable me to help the next person that is in dire need of my services. I love real estate and helping people solve financial challenges!

 While that is nice of you and all, I can assure you, without a doubt, you are wasting your time, but don't let me talk you out of it. Lots of old, crusty landlords in California love to get young buyers on the phone, chat them em up, persuade them to come over their house and hang around sniffing their cat's pee, but in the end, they are not sellers. There is this one old coot up in Redlands who plays games with every investor I know. I don't even market to him any longer he's such a pain in the rear. I have a 92 year old woman I've been mailing for years. Every time she gets something from me, she calls and insists I make an offer. Her price goes up and down by hundreds of thousands of dollars every time I ask her what she wants. I'm not hoping to buy the property from her, because I know she isn't a seller. The house has been vacant for more than 6 years. I'm hoping my letter is sitting on her desk or kitchen table when her heirs clean out her place and one of them sells it to me. 

Your time is better spent focusing on someone with equity AND motivation, not providing a CMA report for some buy and hold till I die investor who will let it go to his estate so his kids can fight over it and end up hating each other. That's the way it goes sometimes. Next!

Originally posted by @Account Closed :

Here is the update. They always say that you need to get a seller that either HAS to or NEEDS to sell. This is not necessarily the case with this property. The owner has several investment properties and just wanted info on what I thought he could get. While I was disappointed, I am eager to learn from disappointments. I am putting together a nice PDF report on comps in his area in the hopes that he will want to work together when he IS MOTIVATED. I always want to provide value and this gentleman was very appreciative. This is a relationship business and I look forward to assisting him in any way I can. I look at the experience as just that, experience. It will enable me to help the next person that is in dire need of my services. I love real estate and helping people solve financial challenges!

 HI John,

The reason He just wants some money on this property is probably because its a 2 unit property on a parcel that is only legally conforming for a SFR.

No conventional or even quasi-conventional lender or even private lender I know (unless really low LTV) would lend upon this type of property.

The seller probably wants a liquidity event to take him out of the property due to his in ability to get financing on it.

With out legal conforming use or precedent to keep that other structure in place the lender has no restitution to use that 2nd SFR as collateral for lending purposes.

I hope that helps.

Medium new american funding logo  Albert Bui, New American Funding | [email protected] | 949‑514‑5106 | http://albertbui.com | CA Lender # 345453, WA Lender # 345453, TX Lender # 345453, TN Lender # 345453

The second house on one lot legal or not does not double the value.

His Prop 13 taxes will go way up when you become the owner.

I was consulting with my agent and he said in cases like this it is considered a duplex even though the two buildings are separate. The owner owns the property free and clear. 

Account Closed I was kinda getting that feeling that he just was curious what he could get. I'm moving on to find some truly motivated sellers that HAVE to sell. Thanks for the input!

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