Short Sale Deal Points:
|How did I Find the property?||Through my website. Property was pending and scheduled to close in a couple weeks & current buyer was backing out. This was a pending MLS deal|
|Who represented us||The listing agent|
|Location||East San Diego|
|Purchase Price||$195,500 click here for property pro-forma|
|Rehab Estimate||$15,000 (+/- 20%) click here for scope of work|
|Estimate After Repaired Value||$265,000 – $305,000 click here for property CMA|
This San Diego short sale that was pending in the MLSÂ came directly from our website which always surprises me since I donâ€™t specifically try to get investors or sellers from our site.
The Realtor called to inform me this short sale had already been approved with the bank and the current investor/buyer was backing out and that if I could remove contingencies immediately (within 3 days) and close on the currently scheduled closing date so it didnâ€™t get foreclosed on I could probably get this investment.
At first glance the price of $195,500 seemed a little steep for this property. I assumed the sales price to be about $265,000 and construction to be about $35,000 (the agent said it didn’t really need any work but that’s what they all say!) which is about average for a typical (not major) rehab of this size.
I get LOTS of calls & emails about “great real estate deals” and I need to be very careful about how I spend my time since 99 out of 100 Real Estate investments don’t fit our conservative criteria.
I told him it probably wasn’t my deal but I would do a little more research and call him backÂ if I changed my mind. Knowing Realtors don’t get paid unless I they close on a deal I never want toÂ jeopardizeÂ their lively hood by being selfish and saying yes if I really don’t mean it.
I do not subscribe to theory of making offers unless you are almost 100% certain that if you get a yes you are willing and capable of closing.
So I only write offers on deals that I know I will close on or otherwise you risk getting a bad reputation and stop getting deals.
So that means if I know I am going to close a deal I put an offer in that means I need to spend a decent amount of time on research to make sure I can executeÂ successfullyÂ on the project and buy it like I said I would.
To do that successfully I can’t research EVERY property that is sent to me and that means I have to learn to say NO quickly so I don’t waste my time or just as important the person who is bringing me the deals time.
On the other hand you need to be careful that you accidentally don’t turn away great deals. It’sÂ definitelyÂ more of an art than a science and also qualifying the deal quickly up front by playing red light green light as I have talked about in previous posts.
After verifying there really was not a lot of work to be done and a very light rehab and making some phone calls to agents and investors who worked that niche market I came to the conclusion that although our subject property had a converted garage and shared driveway the almost 360 degree views would give it a conservative (re) sales price of $275,000 (I was told $270,000 – $305,000) it made sense as long as I could quickly remove contingencies and get it closed right away.
So quickly I called the agent back, made an appointment to check it out on the inside to make sure it would not be a major construction job I checked it out, made an offer the same day and closed a couple weeks later.
Below are some pictures of the project and a video narration of the deal. For more insight into this deal including our scope of work for construction, our comparative market analysis on pricing and our estimated costs and profits go tohttps://sites.google.com/a/gabhartinvestments.com/sullivan/
In case many of you aren’t aware we have websites set up for all our active properties (look under the projects tab and then click on theÂ property to take you to it’s website), in addition to the left of the screen you will see an RSS feed that updatesÂ every timeÂ I post on the property website.
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