I am in the middle of escrow on a REO duplex property (131K) for buy and hold. Title shows that the property actually has no parking available, only an ingress/egress and driveway access on the neighboring vacant property. There are improvements on the neighboring vacant lot (paving, retaining walls) to facilitate parking. The parking situation/easement issue was not disclosed before offer made/accepted.
I have contacted the vacant lot owner and have a contract in place to purchase the vacant lot pending close of the REO property (26K). I have a seller credit request in place with the bank asking for 20K, which is also much cheaper than putting in a parking area on the REO property to address parking issue. There is no on-street parking nearby.
There is probably a prescriptive easement in place for the parking. I first considered just going with that or getting the owner to execute a parking easement but then it was unclear who would deal with repairs on the vacant lot.
The bank's listing agent said no immediately to the credit but I have not received the decline back from the bank. I am wondering if anyone has tips on dealing with this situation. The request for seller credit didn't leave much room for explanation. Send a more detailed explanation to bank? Any other tips other than just eating it or walking away? The deal cash flowed until this parking issue came up and the 26K extra pushes the envelope on positive cash flow (100/door). FYI it still is a good flip and supposedly will fetch 225-250K as a package deal if I just turn around and sell with minimal rehab.
I am also considering getting a 2 point survey to show clearly the property line. If this is staked out and the line is painted across the parking area they would have to disclose if relisted. Is this a strategy as well?
Thanks for any help on this one. BTW this is my first deal! Thanks BP for all the info, advice and encouragement to get me this far!
Hey @Jeff Zamora Congrats on your first deal!!!
It looks like your thread got buried somehow and went unnoticed. So hopefully this bump with the attention of others who can help.
Best of luck friend!
Update for the curious:
The bank declined the initial credit request. We resubmitted a request for reduction in sale price, and included a letter explaining the situation and the fact that it was not disclosed, along with the accepted offer for the adjacent lot.
The bank ended up reducing the sale price 8K, which we accepted. Escrow closed yesterday. Total cost for house and lot was 151K. This should cash flow at least 100/door and equity is already substantial, so good first deal.
Congrats on closing, and a little extra cash to help it out. And you have the lot next door, no extra parking construction costs, and a more valuable lot..
Sorry didn't see this the first time around, but congrats! And good luck!
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