Hitting a Home Run
Friday, April 18th, 2014
By: Solange Velas, CCIM
The toughest task that a buyer faces is who to work with. This is especially true for an investment purchaser. You are looking at listings on the internet, and in Knoxville, there won’t be many so your first agent interactions will begin with an email or a call. That’s how it all started for Sue.
The fourplex that Sue bought in the Cedar Bluff area
In early July, 2013, I got an email asking for more details on listings I had posted to Loopnet. Sue was looking for a 2-4 unit that her son could live in while he attended UT. Sue would rent out the other units to help with the mortgage. Of course Sue wanted a good deal (who doesn’t?)! I sent her everything that might work and we narrowed the choices down to the Cedar Bluff area.
I follow notices of foreclosure, so I knew that a 4-plex was coming on the market shortly. I also knew who was getting the listing. I called in a favor and got Sue a showing before the property went to market. As is common with most foreclosures, this property was totally vacant and in need of work in every unit including some foundation repair. That didn’t deter Sue, but it made my job more challenging. Though she was hoping for conventional financing, it quickly became apparent that we needed a local lender that could see beyond the warts and get us a commitment so we could be a competitive bidder.
Par for the course, the property went $20,000 over list with multiple offers. Because I have handled a number of foreclosures, I helped Sue win this bid by writing a very tight contract with large earnest money, short inspection contingencies and a quick closing. Sue was smart and chose the local lender I had recommended. Sue also took advantage of my list of inspectors and received a very detailed inspection that allowed her to pinpoint those things that had to be done immediately and those she could wait on. Finally, in dealing with the foundation issue, Sue was able to work from a list of vendors that previous clients of mine had also used. We closed on time.
Recent sales indicate that Sue will have a 15-20% upside in value even after she completes all her planned repairs. What a homerun! When it’s your turn at the plate, I’d love to help you too!
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