Help! Found A Property; Need Suggestions
Here is my first deal (I think)!
I've found a property in pretty rough shape that with cleaning up could bring a good profit. I want to make an offer before I lose it, but not sure how to go about "option to purchase" contract. There are a few things I need to review that may make this property a bad investment, pertaining to zoning and ordinances.
Here's the scenario:
Duplex property - non-conforming unit. One unit up, one unit down. Down is a garage conversion with a low ceiling, added in 1972 without permits. However, the property zoned R-2.
Upstairs is in good shape, downstairs smells like Bat Guano! UGGHH!
Cost of property $450K
Estimated cost of repairs/upgrades: $150K high end
Neighborhood zoned multi and looks as such, however, properties still sell in the neighborhood of $400k+ per single unit.
So, you can see that there is a lot of potential in the property so I need to act fast to at least secure that it doesn't sell out from under me.
SO....
Does anybody have any contract templates with a 30/60/90 day option to purchase included in it that I could take a look at, to get a better idea exactly how the wording should be?
Also, if I got a contract for a specific price, found out what needed to be done to get the property permitted, could I sell the property while in contract and do a dual close with my sale at a higher price, or would this be an assignment, or can I not do this?
Also, if I could sell while in assignment, how would I advertise the property since it isn't mine technically?
What am I missing here?
[addsig]
I use the book 301 LEGAL FORMS & AGREEMENTS, it is great to have around to check out the wording. I have nothing further regarding your situation.
[addsig]
I'm curious as to who gave you such an estimate for repairs. I know you say its $150,000 on the high end, but that seems even high for the high end estimates. Thats like $75,000 per unit.
The estimates are based on completely upgrading the property, extending a rear wall to add additional square footage to the upper unit, adding two bathrooms, a garage, installing new carpet, tile, appliances, zoning, permitting, and architectural design & review.
We are general contractors by trade so I have a fairly good idea on what the costs will be. Thus, the $150K high.
Oh, a little more info, construction costs in the bay area range from $150 low to $200 high per square foot and more depending upon the quality and calibur of work you want. costs are not cheap here.