We recently represented a client that was looking for a second home on Lake Lanier. Our search yielded a slew of homes that homeowners had hap-hazardously added on to over the years, resulting in what seemed like a box with random boxes awkwardly attached. In many cases ceilings were less than six feet, in others we had to walk through a bedroom to get to another bedroom…. What were they thinking?
But one day we saw a new listing appear. On first glance it seemed to have all the right features, on the water with 13’ of water at the end of a permitted single slip covered dock, with a boat lift. On top of that it had a gentle slope from the house to the dock. All this and Fannie Mae had it priced at $151,900. This was a deal so we decided to move forward on it.
Keep in mind that for the first 14 days of a Fannie Mae offering, only offers from owner occupants are considered. With this in mind we wanted to be prepared to present our offer as soon as it would be available to no-owner occupants. This by the way includes second homes. UMMMM!!! So we planned a trip to the house to evaluate it’s condition and the cost associated with renovating to the standards established by my client. The outcome was an estimated renovation cost of approximately $70,000, which would result in an “AFTER REPAR VALUE” of somewhere between $313,000 and $322,000. THIS WAS A DEAL!!
So on the morning of the fifteenth day of the listing we submitted our offer. It was an all cash offer for $141,000. Another offer was presented at the same time, so we received notice of “HIGHEST & BEST”. We modified our offer to $149,000, and was notified the following week that Fannie Mae had accepted the other offer.
About two weeks later I get a call from the listing agent indicating that the other party had failed to comply with the conditions of the contract and were walking away from the deal. He asked if we were still interested. Our answer was yes, at the price we offered. THEY TOOK IT, and we became the proud owners of a home that needed a lot of work.
Once under contract we proceeded to define our original estimates of cost by getting our individual subs to come out and look at the job. This set the stage for us to hit the ground running with the project once we closed. So within about 30 days we closed, and were ready to start.
Our approach is generally to demo first, and then complete the outside before going inside. We did the same here, except there were times when we were working on both, just to insure that the project was completed within the 6 week period we had projected. I will not begin to list all that we did to the home. The “Before & Afters” will attest to a lot.
However I will point out that the front of the house needed some POP, so we decided to add a front porch, and create two faux windows, add a curb and sod. It turned out great.
As we concluded the renovation phase of the project, it was now time to arrange for the appraisal. It ended up appraising for $317,00, well within the range of $313,000-$322,000 that we had anticipated. So everyone was happy. The buyer got a great deal at $280,000, for a completely renovated home on the lake.
Keep In Mind
That just as in this case, we will purchase a home, rehab it to your specifications, and sell to you after renovations are complete, for a below market price.
Van Purser is a licensed real estate broker in Georgia. Since1981 he has successfully purchased and renovated over 400 homes. His expertise is in the area of foreclosures, rehabs and fixer uppers. Additionally, he has represented hundreds of clients over the years as a broker with Metro Brokers, RE/Max and now with his own firm. He and his wife, Jeanne, who is also a broker, have been married since 1977. Van can be reached at 770-623-3313 or by email VanPurser@VanPurser.com