Property Details. : This is a 2/2 unit with partial ocean views in the miami beach area. This is a beach front building with 24x7 security, concierge and valet. The unit is good condition expect that it is very old and never being updated in the last 20 years. This was a vacation home for the seller. So they only stayed a month or so every year. I currently rent my unit in the same building so i know it unit well.
ARV :620k - 640k
Purchase Price : 480k
HOA : $750
Remodel : 55k
Deal: I had initially submitted couple of offers at 403k & 436k which was shot down. The seller states he wouldn’t look at anything below 475k
According to BP calculators i can make a profit of 28k if I buy it at 480k which is basically my entire year’s which is what i am paying in the rent in the same bldg. I am in the process of submitting another offer for which i want your advice if it is doable or a bad bad deal.
I plan to submit the following.
Offer price at $476,750 with seller paying for 100% of the closing costs and seller carry 10% for up to 5 years at 7% interest rate
What do you guys this of this ? I feel he wouldn’t accept the seller carry. Is there anyother creative structure i could present ?
@Soumya Brijesh , if you have a property in Miami that you can even smell the saltwater from and a seller is willing to take back a seller held simo purchase money 2nd mtg and with that much equity, you had better not make ridiculous offers as you will likely do, what as a FL Mortgage Broker I see so many investors do, and that is...
...Negotiated their selves right out of a good deal!
I'm seeing so many investors starting to enter this 2018 seller's market with a 2010 mindset, thinking they're going to make stupid lowball offers hoping to find a seller asleep and the wheel!
However, you may have found that...asleep at the wheel seller, so don't fumble the ball on this one!
You said you plan to submit the offer with Seller to pay 100% of the closing costs.
QUESTIONS: How much is that amount?
@Account Closed thank you for your insight. the closing cost is about $9k
May as well go all the way and ask seller to pay doc stamps on the deed and owner's title policy too because you may have been asleep at the wheel seller.
I'm assuming this is a for sale by owner correct?
Hi Soumya, the east coast of South Florida is a unique market for sure. It may be a sellers' market, but in my opinion, the property values are a little inflated and you are starting to see some small price adjustments. That said, the projection still looks sustainable as foreign cash investors continue to value this area; add to that new investors from northern states with high tax burdens, and this continues to be a great real estate market. What's most important is that you do your diligence on the property to ensure you are not overpaying.
Thanks for your insight @George Griffith . You are right, I have started the seeing the price adjustments mostly high rise condos especially if they are dated , they are not moving as fast they the sellers expected.
Hey @Soumya Brijesh !
By reading the title I thought I was going to walk into something MFH related. Not sure where the house hacking portion fits in here.
"According to BP calculators i can make a profit of 28k"
Are you making this after rehabbing and selling property? How long are these properties sitting on the market? Every month you are losing $1500 on this property between HOA and taxes, did you factor this in?
I am also curious how you came up with 55k remodel? That seems like a large amount for a condo that only requires repairs within the unit.
I would be sure to look into other units in the same building if one seller is not budging on their price. Typically each condo has a few units in the building sitting on the market. Hope this helps!