The Really Expensive Lot. What To Do?
As some of you may know I have been out buying lots, or long term leasing them when I run short of money. Anyway,
I saw a property noticed in foreclosure and it was in the best part of Beverly Hills Single Family Residential. Just south of Sunset Blvd.
The house on it is your usual very tired old time wannabe Spanish Colonial with all the broken tiles on the roof and the jpaint peeling and the marks of years of heavy living and no maintenance., Was once listed for sale at $4,000,000 but alas there were no new idiots available to buy and now it has begun foreclosure and I get a call from the owner now living in Palm Springs. He owes something like $6,000,000 against it. Mostly secondary and even some junior Trust Deeds given on various looser film deals.He asks me what to do and I am at a loss.
I supose I could trundle along and try to get all these odds and bods to accept pennies on the dollar but what of the first which is held by one of our older banks and that is $875,000 and they will not discount cause they have waited long enough and now is a moment of truth.
Frankly I cannot think of anythng to do except offer to lead a group prayer. I cannot for the life of me think what to do with a $875,000 buy of the lot. Design and put up a $2,000,000 cost of construction house? In this market which is trembling like an upcoming major earthquake.
The newspaper tells me today that the average Los Angeles Property has gone up 27% in May and what I am seeing is the first really steady resistence to prices in the $800,000 to $4,000,000 area. Is it just me, or should I change to Pepsident?
I would appreciate a little advise does not have to be polite. I await your postings.
Lucius
what are the comps on as as built that would cost you the 2.8M for land+building costs. If the as built is say 4M, 1.2M for 12-16 months of work a good return?
Esp. if you have equity in properties you could cross-collateralize, or good credit/income for the str8 construction loan.
I personally like some of these deals as you can make 1 yrs salary in 1 deal if all the pieces dovetail.
In hot areas like that you might even be able to find a "build to suit" if you don't mind playing developer and running the job.
or wholesale it to a builder in the area.
Lucius,
Is there any merit to rehabbing the existing house and not dozing it--or is it beyond being able to be transformed?