Is This A Sub2 Deal? (posted In The Rehab Forum Too 8/28)
To give you perspective on the market, APARTMENTS in the n'hood are 4sale as follows:
-- 3-bedroom Co-op apartment $300k
-- 2 bedroom in modern 24-hr doorman building built in 2001 $265k
--Brownstone $899k +
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ok, I've been talking to this owner for 3 yrs.
This is a brownstone in NY that hasn't been touched in 30 yrs. The seller has 3 buildings with small mortgages on all of them. I'm guessing they are using the money for income (reverse mortgage for seniors?) because they do not have tenants paying market rent. The market is out of control in NY as you know...shells w/no roof are going for $ix figures.
Owner has a $350k mortgage as per the public record & when someone asks about the smaller brownstone the asking price is $800k "as is". Get this, the seller doesn't want to give anyone a contract....seller is expecting a buyer to get an appraisal and go straight to the closing table. While this market defies logic, it's not that hot and neither is the block relative to other blocks in the n'hood.
I can rehab @ cost. The 5 min phone conversation today was around the seller "helping" me to get the rehab done & cashing them out when I re-fi. Since they are older, my angle has been "the daughter they never had" trying to find an affordable home in the area.
I have to check the C of O & get the appraisal done, but the goal is to convert the brownstone into 2 duplexes -- cash the seller out after rehab -- & then convert to condos (exit strategy). The seller doesn't know about the condo conversion. I can sell the duplex condos for ~ $600k each.
Question: How would you structure this deal & what would you offer (i.e. as is appraised value, ARV less rehab costs) to tie up the property? We're meeting Mon.
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