How We Bought This Home in Falls Church Virginia when no one else would
A couple months back a realtor friend presented to me a property. It was a nice size rambler in the Lake Barcroft Subdivision of Falls Church Virginia. That is a great area that I know well. Homes there usually sell fast but this sellers could not find a buyer and was struggling to sell this home.
The family had owned this home for a very long time. The parents had recently passed away and the children had inherited the home and were now trying to sell it on the MLS. The home sat for months and the price was lowered several times.
When I first saw the home I couldn’t understand why it was not selling. The neighborhood was highly desirable. The home had previously been expanded and was in great shape, structurally. It was brick and it sat on about a quarter acre of land in a prime location. The home needed new kitchen, HVAC, flooring and paint. The bathrooms upstairs were odd shaped and too small. They would have to be expanded and the basement would need to be reworked and finished.
This is all fairly typical stuff, but, when I walked in the back yard I saw the real problem: a huge raised indoor swimming pool.
At first I thought this was awesome but upon further inspection I noted some serious structural problems including a nasty crack in the pool deck and another one on the foundation wall. I also saw that the pool had a separate HVAC system that would need to be completely replaced.
Cracked and Settling Pool Deck
Picture of the Exterior Crack in the Foundation Wall.
I got contractors over there to bid out the work and get an idea of what it would cost to repair this thing. When the bills came in the pool was going to cost over $30,000 to repair. But, I thought, who really wants to carry the cost for an additional HVAC system? Who wants to heat and entire pool area all winter, not to mention the water.
Pools are pretty questionable as to how they’re going to affect the value of a property. In Falls Church Virginia and in the greater Washington D.C. area it has been my experience that pools are generally a negative when trying to sell a home.
This pool was certainly killing the value on this home. We determined that we could demolish the pool and build a nice deck in its place for about the same cost of fixing the pool. But, even with that decision made there was not a lot of profit in this deal. The numbers were very tight.
My company is Snow Goose Homes, LLC and we normally buy homes in Falls Church Virginia for Cash with a very fast closing. But, cash is very expensive. The cost of capital for cash on a deal like this would have made the deal a money loser. So, we changed our approach. Rather than doing a quick close cash deal we offered the seller a higher price but we asked for the standard 30 days to close. The seller agreed.
We then went to one of our good local bank contacts and were able to secure a purchase and construction loan at a rate of about 5.5% and then we only had to bring about a $100,000 of cash to the deal which cut our capital expense by about 60%.
We kept our word and we closed on this deal about a month later. The seller was happy and they asked to see the end product once we’re done with the remodel, a request to which we happily agreed.
I buy homes all of the time and I find that you can’t have just one approach. Each deal is different. What is important is that you do your homework and make sure that you can deliver on your promises.
Major structural problems often scare off the average home buyer. This pool was a big scary job for the average Joe. That killed this home’s value. Not for me; I was very happy to purchase this home and the sellers were happy that they were able to sell the home, and put cash in their accounts all while knowing the home would be made right for another family.
Snow Goose Homes, LLC
We buy Falls Church Virginia Homes, FAST.
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