All Forum Posts by: Devon Baldwin

This was requested by Jonathan so I just thought I would put it on here anyway. It's obviously very rough, but the proposed plots are the exact size as lots that are less than a block away. Note, this is adding 12 plots (the description above said 7).

This is an off market property and is not under contract yet (offer is going in today/tomorrow). Since I'm pretty new to this, I'm not quite sure how much I should be sharing at this point, but I wanted to get the general idea to see how interested investors/ financiers may be. The value is in the property for sure:

Location: Renton, WA

House Details:

• 3 bedroom + bonus room
• 1.75 bath
• 2110 Sq FT
• Needs no real work (maybe a kitchen)

Property Details:

• Zoning: R8 (this is up to 8-11 DU's per acre)
• Size: 2.16 acres
• Utilities: Gas, Electric, Water, Sewer and Cable

Comments:

• There are currently 2 different development projects currently in progress within a 2 mile radius.
• Most of the properties close have already been plotted out and sold.
• The house value alone (without property) is around $325,000.
• In 2006 the property was purchased for $710,000
• Lease is signed for the next year for the house (the rest of the property can be used) this helps with holding costs. 
• Projected (non platted) assessment range: $433,305 - $598,000
• It's hard to find comps because no R8 properties have been sold recently in the area, but here is a link with some things that are close: http://www.matrix.nwmls.com/Matrix/Public/Portal.aspx?ID=14404743551

Exit Strategies:

1. Finance through private money, get engineering plans/ permits (plat pending) in for different plots and refinance.

• Finance costs for plotting with road and utilities to plots then sell. (Projected costs are $150,000 and sell price at this point is $7-800,000).
• Hold with lease and Finance costs for building of duplexes (already have plans and builder for $170k per duplex 6bd/4bath/3100sqft) and either sell/ use cashflow ($1800/mo per unit) or a combination of the two.

2. Finance through private money, get engineering plans/ permits in for different plots and sell. (Projected sell price per plot is minimum $87,000 x 6 = $522,000), then we still have house for cashflow or another $300,000+.

Offer price: $385,000

Let me know if you're interested in financing or maybe even buying (with me as a wholesaler). 

Thank you,

Devon Baldwin

Found this site. It's all modular home duplex designs. 

http://www.ritz-craft.com/floor-plans-and-options/...

Will do

A cap rate of 9% in my market isn't bad. You're cf positive on day one like you said. I think your cash flow might be a little smaller than you think, but yeah. It's safe and not a bad deal in my market. Not sure about your market. 

Yes, you would have to live on site for at least a year before you could rent the property and probably at least another 6 months before you could refinance. 

Bigger pockets market place ^.^

Audible.com is my savior. I get two audiobooks a month for 19.99 and there are plenty about REI and other business topics. That being said, I would love to know some more podcasts too. I too, have heard all the BP podcasts.

Full disclosure. I'm still new. 

First, hard money is going to charge an arm and a leg. Like %10-15, which would take away any equity you would have. If those numbers are correct, a %3.5 interest rate gives you a %6.5 cap rate. So you would have to refi within a couple months to not get under water. You won't be able to refi until you have done all of the renovations because you're already only at a %6 cap rate, which in my market is about as low as investors want to go. 

Even if you make it to renovations (which get you %15 more value), you still have very little equity. A lot of lenders want over %70 LTV to refi. The numbers in the calculator also seem low as far as utility costs, but I'm not from your area.

Again, I'm a newby, but that's my assessment of it. Without knowing your market at all, I think the guy is asking too much. ESPECIALLY if the place is rundown and going to be in need of massive rehab. 

So let's be honest, coal isn't going away in the next 10 years. Assuming that mine is set for that same 10 years (maybe you can call and ask how much coal they have left?) and you get an average of your estimates (%10). You're investment is gold after that. %20 cap rate is nuts. In my market %10 is good. Buying property for it to appreciate is called speculating. 
Just my two bits.