Closing on 16 unit on March 28, 2015
801 BERNICE, ODESSA, TX
PURPOSE/PRINCIPLES: Property has equity but no cash flow, will require terms or a discounted price to take on risk.
OUTCOME: Buy at discount or obtain terms for 2-3 years, refinance out seller, hold long-term or sell depending on market conditions.
- ARV: $640,000
Cash price: $200,000
Repair costs: $80,000
- Total: $280,000
- LTV: 44%
- Terms: 36 months
Money in pocket for Borrower
- $8000/mo after expenses
- $300,000 in equity at sale
- $345,000 down, sell at $645,000 in 6 months
- Refinance at $500,000 and pull out $155,000 cash
- lend $345,000 at 8% for 12 months
- $13,800 profit after first 6 months
- $27,600 total profit after first 12 months
- Lending to experienced borrower with 725+ credit score
- LOI done
- DD in process
- CLOSE in process
- SELL OR REFI 24-60 months
- 16 units REO
- Price: $240K
- $225K for the note
- 34 any size rentals
- …in a 0.77 mile radius.
- Median rent: $988
- Average rent: $1188
- 60% between: $722 – $1655
- 80% between: $477 – $1900
Seller wants $240k if he forecloses and $225k if we foreclose on the property.
- The seller did a promissory note with the buyer in January of this year.
- The buyer is 2 months delinquent
- seller is getting ready to foreclose.
- No financials but it needs some work.
- Below is the seller’s response:
- Tenant pays electricity
- Has a waiting list of tenant applicants
- Replace all the windows with new energy efficient windows
- Redo all the water lines with PeX Move it into the ceiling, instead of under the foundation.
- Remodel all the bathrooms.
- Update all the heating and Air
- redo the outside fascia and siding
- replace all the flooring on the lower apts with ceramic tile
- Replace some cabinets in the kitchens
- New entry doors
I do not have an info , but talked to Raymond who did maintenance there.
He is the only one there because they evicted all the tenants so they could do the remodeling.
I don’t know what they have done.
This is what we had planed on doing, before the sale
- As far as access, if Raymond is there you could probably get access I think.
- He is now 2 payments behind.
- We have not started the formal foreclosure as of yet but want to before the first of Dec.
- Attorney is ready to proceed