Investor · Dallas, TX · Member since 2019 · 4 posts · 1 vote
Hi all,
I am looking for any suggestions on how to proceed with a very appealing off-market opportunity in Oakland, CA. My business partner and I have just started investing in a few rental properties, and this seems like a no-brainer to us. A summary of the opportunity is below.
2 4bed/3bath SFH offered together for $1.75M.
Comps show implied value of $2.4M-$2.5M
Very desirable neighborhood of Oakland
Seller has offered to finance a portion of the total purchase
Both homes are completely vacant and recently remodeled (so we can command market rent for all units)
Since my business partner and I have recently started investing, we do not have significant reserves to put down $300k+ in a traditional loan package. Our main issue is figuring out how to get the purchase initially financed, since we would be able to almost immediately refinance with the significant equity upside here.
If you have any thoughts, lender/private lender recommendations, or are interested in learning more, please don't hesitate to reach out.
1- are these two homes on a single lot, or each on separate lots?
2- if it’s a good area, the homes are vacant and recently renovated, why isn’t the seller selling them at a premium to homeowners? Something doesn’t sound quite right here...there has to be some issue(s) with the Properties to warrant a large discount. You need to figure out what that is!
3- even at $1.75 mil, I doubt the cashflow is that great here. Higher end homes usually do not make for decent cashflow.
1- are these two homes on a single lot, or each on separate lots?
2- if it’s a good area, the homes are vacant and recently renovated, why isn’t the seller selling them at a premium to homeowners? Something doesn’t sound quite right here...there has to be some issue(s) with the Properties to warrant a large discount. You need to figure out what that is!
3- even at $1.75 mil, I doubt the cashflow is that great here. Higher end homes usually do not make for decent cashflow.
Hi all - yes the homes are both in move in ready condition. @Amit M. there are many reasons why the seller is willing to sell for less (one being significant debts owed by the developer). And we are pursuing a roommate strategy for the rent. One of our friends is partnering with us and moving into the one of the rooms. He knows many people who are going to come and individually rent the rooms out, so on a rent per room basis, the cash flow is actually very attractive. Much more so than if we were to rent out the house in its entirety at the market rate of a 4bed/3bath property.
1- Developer’s debt is not enough of a reason to give a 30% discount on owner move in ready homes in a good location. 2- market rent is market rent. Same 4 tech bro’s can go and rent a similar 4BR home in that area. You’re not going to get more than market rent, unless you start making bunk beds, add sleeping spaces, etc.