DU Real Estate Experts: need advice

[WilmywoodNCparalegal]

Would you do this?

My boyfriend and I are thinking about submitting an offer for a 3-story townhome right across from the beach where we currently live. There are four townhomes per unit, all built in 2007, none of which are sold. The owners (investors from Ohio) are desperate and they are offering owner financing.

These homes are well done and have a private elevator, 3 bedrooms and 4 1/2 baths. All appliances are included (dishwasher, washer, dryer, etc.) and we are seeking to purchase all the furnishings (which we already know they will be ok with). Normally, these are townhomes that sell from the 300K range and up.

We are offering $270 with $11K down and the rest owner financed for 30 years at a fixed interested no higher than 5.5%. It seems almost impossible to find out if a property is 'worth it' (whatever that means), especially in this market. But we think that once we live there, other people will move in and, being that it's an area a bridge across from the beach, it will acquire value in the future.

If you want to take a look, the property's website is www.overlookcc.com.

Thanks!

[flvegan]

1. First advice: get a title search/exam done, and buy an owner's policy.

Second advice: I see that you're a paralegal, so you'll know if you need an attorney or not.

Third advice: since you're not married, I'd get fee simple in a joint tenancy with rights of survivorship, just in case.

Also, take into consideration what the association fees may be per month.

Otherwise, the place looks really nice. I think "worth it" is also in what it's worth to you, especially if you plan to live there a while.

At any rate, good luck to you and your boyfriend.

[WilmywoodNCparalegal]

2. Thanks!

Yes, on second and third advices. Association fees include insurance. NC requires that home insurance for townhomes be divvied up as an HOA fee.

My only concern is that, while the place is very nice and nicely furnished and it could leave open the possibility for either my boyfriend's or my parents to live (as they are in poor health) with us, what if no one else buys in the community and what if it depreciates, thus leaving us upside down on the mortgage (even if owner financed).

Bottom line, has the market reached the bottom or is there more to go? Even so, our down payment would be loaned from my boyfriend's 401K. At the same time, our chances of qualifying for a conventional mortgage are slim to none.

[flvegan]

3. I can't speak for NC as well as I can for Florida, but

Over the last two months, I've seen a 20% increase in closings since March. I think Florida has hit bottom (less the foreclosure market, which is a disaster right now). NC by trend, I think has usually been a month or so ahead of Florida.

I think that if you're this concerned and there are a number of similar units available, it might be worth circling the deal for a couple weeks and wait to see if anyone else buys.

Are there any comps in the area that you can check sales against what you're looking at?

[WilmywoodNCparalegal]

7. Unfortunately no real comps in the area

This beach in NC is a little peculiar. It is somewhat anti-social in that it is not tourist-friendly, despite the fact it attracts plenty of tourists, and it has little commercial development. It is divided into mainland and beach island. This townhome is on the mainland side, but there is a gazebo and pier at the end of the road with access to the Intracoastal Waterway. It is within 40 minutes of both Wilmington, NC, and Myrtle Beach, SC.

The other kinds of homes in the mainland area of the beach tend to be older and/or mobile homes. The nice homes are on the island side, most of which have easy ocean/waterway access.

These units were finished in late 2007/early 2008. No one has bought there; there is no one living in the development. There is a club house with pool under construction. There is also a huge single family home just built for sale for around $500K (not surprisingly, no one has bought it yet).

We've been going back and forth with the realtor representing the development for nearly a month and it's been nearly impossible to obtain unbiased opinions over whether it would be a good deal or a major loss. We intend to live in the unit for some time, especially if either of our parents joins us (there are three stories; the ground level floor has a separate bath and closets and could be its own bedroom; moreover, there is a private elevator which would be ideal for our parents who are either disabled or getting that way).

[old mark]

4. Everything is a crapshoot right now, but the deal sounds good since

you have the owner financing and the money for a DP, especially since you plan to live there, too. IMO, if it is not at rock bottom, it is close, and if you can afford the payments for a while you will do well with this.

It is noa advisable to wait for the extreme low or the extreme high - close is sometimes close enough.

Good luck - please post how this works out?

mark

[Arugula Latte]

5. What about the whole hurricane/beach erosion issue? Have you checked into that?

I know there's never a guarantee when it comes to Mother Nature, but there must be ways to find out which areas are at highest risk, etc.

Good luck -- sounds like a cool place (but more bathrooms than bedrooms? ;) )

[cabbage08]

6. If you can comfortably pay the note you should go for it.

Also take into account the tax benefits of owning versus renting. I would even consider going lower to see if they will bite.