Is there anything I can do?? Help!!

9 Replies

Hi guys I posted about this a few days ago but I have not really received a lot of input. I have a little more information now and can probably form a better question. I am a wholesaler out of the Fort Worth area and I am also trying to develop a farm in the Weatherford area. I only wholesale deals. An owner responded to my marketing and said her house had been in a fire and she just wanted to walk away and start over. After a few questions I decided to meet with her and see if anything could be done. Upon arriving at the property I saw what I had previously assumed which was that the house is a total loss. It would be a tear down and I am guessing a new construction type deal. The owner  said she just wants out and would settle for a few grand. I did not put her under contract because I do not want to harm her in any way if this is not a deal that can get done. I feel like she has been through enough as it is and I do not want to string her along with false hopes. I really want to help this owner so if anyone can point me in the right direction it would be greatly appreciated.

Now for my questions. How would I do comps on this property? Should I treat it as a lot or compare it to other houses that have sold in the area? How do I figure out repair costs considering the building would have to be torn down, cleared out and rebuilt? What type of buyers would be interested in a deal like this? I know how to analyze normal wholesale deals but with my lack of experience I have never dealt with anything like this. I would appreciate any positive input. I am learning here and would love to help this owner out, but if it is not something that can get done I need to let her know as soon as possible so that she can figure out her next steps. Thanks in advance. I look forward to hearing from yall.

@Ashley Guzman  It's basically a lot. There is cost involved with tearing down the house, at the same time, there will already be utilities to the property, etc. so that's a benefit. Also, since a house had been built on the property, you may get some credit back to the next owner for building fees already paid. (Check with the building dept)

You said it's a farm, therefore; I assume it's probably on a septic? 

What is the market like in the area? Is there any demand for new homes? If so, your potential buyer might be a contractor that wants to build a spec home. Look around and see if there are any contractors building in the area, and approach them. Good luck. 

Originally posted by @Ashley Guzman :

Hi guys I posted about this a few days ago but I have not really received a lot of input. I have a little more information now and can probably form a better question. I am a wholesaler out of the Fort Worth area and I am also trying to develop a farm in the Weatherford area. I only wholesale deals. An owner responded to my marketing and said her house had been in a fire and she just wanted to walk away and start over. After a few questions I decided to meet with her and see if anything could be done. Upon arriving at the property I saw what I had previously assumed which was that the house is a total loss. It would be a tear down and I am guessing a new construction type deal. The owner  said she just wants out and would settle for a few grand. I did not put her under contract because I do not want to harm her in any way if this is not a deal that can get done. I feel like she has been through enough as it is and I do not want to string her along with false hopes. I really want to help this owner so if anyone can point me in the right direction it would be greatly appreciated.

Now for my questions. How would I do comps on this property? Should I treat it as a lot or compare it to other houses that have sold in the area? How do I figure out repair costs considering the building would have to be torn down, cleared out and rebuilt? What type of buyers would be interested in a deal like this? I know how to analyze normal wholesale deals but with my lack of experience I have never dealt with anything like this. I would appreciate any positive input. I am learning here and would love to help this owner out, but if it is not something that can get done I need to let her know as soon as possible so that she can figure out her next steps. Thanks in advance. I look forward to hearing from yall.

Fire can make a property appear more damaged than it is. Sometimes its reparable sometimes its not. Why not get a professionals opinion of whether its a teardown or not as soon as possible. Do a walk-thru with a licensed contractor and let them decide. If its a teardown you need to secure end buyers that are looking to close on the lot for the most part. Moreso you're looking for developers that want to rebuild. Actually, now that I read again, you said that you wanted to build in that area so why even bother wholesaling it? I t could be just what you were looking for...

Kudos,

Mary 

Agree with the above poster. I would also recommend getting in touch with reputed construction professionals in the area and forming connections which you will undoubtedly find valuable in the future. Walk the property with builders and general contractors who have extensive experience. If they know their stuff, they should be able to spitball quotes as they walk. Sounds like you stumbled on a good deal. Terrible moral situation to be in, however.

Karen, thank you for the advice. No when I said farm I just meant that I was in the beginning stages of trying to market to a specific area in Wetherford Texas. I should have written that a little more clearly. I will check with the building dept. in the morning about the credit. Would I just put that in the proposal to an end buyer once I have it under contract to let them know? Also, in doing comps would I just compare to recently sold lots in the area? As far as the market in the area, I think that's where it gets a little bleak. I had an agent do comps for me and the only thing he could come up with were two houses that sold for cash a year ago. It is a very tiny town with really no upward trend in sells from what I can see. I thought maybe it would fit for a buyer who would want to put a multi-unit on the lot, possibly a four-plex. It is a good neighborhood but just from driving around it looks like it is a lot of renters. I have to do a little more research on the area as it is out of my particular area that I am familiar with. I told the owner to give me a few days to see if I could help come up with a solution for her, so I really would like to try and help her if I can-but I will not put this thing under contract until I know it can be executed. Thanks again

My first two thoughts were: 1)  What liens/mortgages exist against the property?  2) Is any insurance going to come into play?    If there is a small mortgage and she has the insurance to do the rebuild, definitely look into it further.  Just don't give her a few grand for a house that's thousands under water and damaged to boot!

She owns the property free and clear, that was the first thing I asked her. However, she was in a lapse period of her insurance when the fire occured so she is not covered there at all. She basically lost everything in this fire. I honestly do not want to rake in the bucks here, I just want to help this owner get a chance to walk away from this devastation and move on with her life. I told her that I could not gurantee finding an end buyer and that is why I have not put it under contract, but that I would do everything I could to help her. 

I've lived here for years, Weatherford isn't tiny, its just not big either :) and there actually is quite a bit of upward trending right now. I'd be happy to help you with the comps and analysis based on what I know about the market. . pm me :)

Ok sorry again, it is late and this has been on my mind all day--the property is in Jack county not Parker. Again, I apologize for not being more clear. It is in Jacksboro, right by the school if you are familiar Shane. I will pm you. Hopefully I can get a little guidance on this so I can at least let her know something within the next few days or so.

@Ashley Guzman  You won't need to put that in the contract or anything about the potential credit, you don't want to tie yourself to that, just in case, but it's good info to have, then if you find out they'll do it, mention to any potential buyer that the building department "might" give a credit, etc. 

Also, you mention that you think it would be good for a fourplex or ? Check planning and find out what the zoning is. 

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