Completed Rehab Project...exit Strategy Change?
We (my partner and I) just finished a rehab (basically a great update job) on a house is a so-so area. It is very close to a huge country club/golf course that the PGA just announced would be the home to one of their major tournaments for many years to come. Here are the numbers:
Purchase Price (with CC rolled in ): $101,500
Total rehab amount: $19,000
Total invested: $120,500
House is on the market for $154,900
I have it listed with the agent who brought me the deal. Normally I would not list it with an agent, but I felt this was fair. We agreed to have him list and try to sell it for a 90 day period, after which I would then handle the selling, lease purchasing or renting of the property myself.
$154,000 is a fair price for the up and coming area. A year from now it (the area) will be even better. We could probably get 140k-145k in a hurry if we dropped the price.
We have about 60 days left on the listing agreement are not getting hardly any showings or traffic on the property, so I am starting to plan my contingency. Here are the options we are considering:
1. Lease Purchase with 5% down.
2. Sell without agent and probably attempt to carry a second for 10% and a slightly higher interest rate...in an attempt to get someone with challenged credit qualified. Dropping the agent's 6% will almost cover the the amount of the second note we would be carrying, so we are still where we want to be (profit wise) if the buyer ever defaults on the second.
3. Use as rental - which we really don't want to do, because we want to use the profit for other investments. I suppose perhaps we could do a cash out non-seasoning refi and then rent out as well. But we have a many nicer things in the house than you would normally put into a rental (16" tile, new berber,new deck, etc).
Any thoughts?
Thanks in advance.
Suntzu
i would do the l/o with 5% down for about 2 yrs. i would not list with the agent you are buying the house from them your obilgation can end there. i advertize myself. "rent to own ,no credit ok, no bank" the response in my area is good. you can put out a add and test the market before you buy and have your t'b's lined up.......km