Distressed Condo Community on the rebound!
I am seeking guidance (and funding) for a very unique opportunity in an undervalued condo community in Lithonia, GA. Normally, I wouldn't be interested in this, but I am for 3 very good reasons. The first reason is that I am working directly with the HOA so they can feed me deals via quit claim deeds or HOA foreclosures. The second reason is that the HOA is in the 2nd year of a 4 year assessment to improve the community by fixing all the exteriors of all buildings, removing dead trees, repaving walkways and working toward 100% resident compliance with HOA dues and more... The board is very engaged in improving the community. One board member owns 4 units and she is very active with the HOA. She is also retired and has a lot of free time to devote to this.
I am currently rehabbing 1 unit in the community (acquired via quit claim deed) and there are several more on the way; 3 coming next month. This is the 3rd reason. The HOA board members all like my plan to go in and rehab these properties, record 2-3 sales with owner financing to set some good comps so banks will start lending in there again. There are 1BR units, 2BR units and 3BR units that are either flats or townhouses. My goal for the 1BR's is ARV's of $55,000. The 2BR's to have ARV's of $70,000 and the 3BR's to have ARV's of $90,000+. This community is nestled into a nice wooded setting and feels very comfortable and there are lots of restaurants, retail stores, Walmart and a Lowe's a very short drive away. It is also a short commute to downtown Atlanta and the Atlanta airport.
This first one I am doing is a 2BR/2BA with 1200SF. My plan is to do a really, really nice rehab on it and then get it appraised. After that, I plan on owner financing it to set my first comp.
My question is this: What is the best way to attract lenders that will give me favorable terms so I can do several of these at once? Remember, the HOA is giving me the first crack at anything that comes up. There will probably be 15 properties this year alone. Oh yeah...the HOA is also giving me very favorable terms on paying back all the dues in arrears for the quit claim deeds and any of their internal foreclosures. The most I will be on the hook for is 10K per property with 18 months to pay it back interest free. They are forgiving all the penalties and interest and I have negotiated paying no more than $10,000 for each property, regardless of what the HOA is owed. My costs will be roughly 50% of the ARV’s or better with 10-25K rehab budgets.