As many of you know, the buyer who was represented by Michael Parker pulled out, and we entered into a contract with Matt Weaver’s development group, Blue Centurion Homes. Terms are $650,000 purchase price, 30 day DD and 60 day close, with seller option to extend to 90 days for approvals.
The grading permit will be ready to pull. The building plans should also be plan checked and approved, I don’t foresee a reason why we can’t hit our June 4th deadline, but with the City being backed up like it is, anything is possible.
The buyer has had no issues thus far, and I’ve been in touch with them providing plan updates and information for their feasibility analysis. So far, so good. I will keep everyone posted with any new developments.
– After a confusing couple of weeks negotiating with buyers, we are in escrow to sell 53rd Street. Summary of terms:
– $720k purchase price
– $40k commission for buying broker, $21.6k commission for selling broker
– 21 day due diligence period, 45 day close with seller option for 30-day extension
– Close only contingent on delivery of approved plans
It’s a fair offer and I am looking forward to closing this thing out. Grading plan is nearly stamped, just need to make minor changes to the formatting of the plans and we will be good. Building plans are also pretty much ready to submit, waiting on some information and preferences from the buyer/builder and we will submit.
Two formal offers on the table for 53rd Street. The first is at $650k gross, with a 30 day DD and 60 day close. The second is at $720k with 21 day DD and 45 day close, but has a much higher commission. We will discuss the pros and cons of each offer and plan to enter into escrow within a couple days
– We have signed a Purchase and Sale Agreement with Reza Shera for $700k, however we are waiting for him to sign and send back the executed version. I anticipate this happening in the next 24-48 hours.
– Once he signs, we will start expedited building plan check, which is a breeze in comparison to grading plan check.
We have received 4 LOI’s to this point in time. The best offer is from a reputable developer for $700k, with a 60 day DD period and a 90 day close. We expect to counter a couple of the terms. Matt and I were both thinking cutting the DD period down to 30 days, with close in 60, with option for us to extend to 90 if we need to finish the approvals.
Vil has brought on a potential buyer who is interested in learning more on this project. We spoke briefly over the weekend, on Saturday, and he said he would look over the package and circle around with me at some point this week. I had not heard from him, so I put in a call today and left him a message. The other potential buyer has not come back to the table. If this potential buyer does not make an offer on the project in the next week or so, we should get together and discuss our next move.
Matt Weaver has a buyer circling. The buyer viewed the property on Friday and touched base with him, mentioning that he will discuss a potential offer over the weekend with his capital sources. The buyer had very minor concerns regarding the plans, and may request some redesign. For example, the buyer mentioned that the bathrooms don’t stack which would add plumbing and structural costs. From our experience, these costs are very minor and don’t add up to very much. However, we told Matt that we can work with them and come to an agreement on it somehow, but the sooner we get into negotiations, the easier and cheaper it will be for them to change the design if that is the way we wish to proceed. We may also just agree to knock off $10k or so to the purchase price.
Matt is working on getting him to the table, so he will keep me posted. I hope to have good news soon.
– We are awaiting response from the City regarding our second submittal of grading plan check
– Our structural engineer is completing the soldier piles and tie backs, so once that has been complete, we will submit to building plan check
– Most importantly, I met with a potential buyer yesterday at the property, and he expressed interest in submitting an offer. I didn’t push him for an offer but he seemed very interested. I will follow up with him this week
– Another potential buyer expressed serious interest to Matt Weaver on Friday, and asked a number of questions regarding the affordability of units and changing the unit layout slightly, but said the numbers work for them. I expect an offer from them, I just don’t know what price to expect.
– I am out of the country so will be unable to participate today. I hope everyone had a great holiday!
– Since it’s the end of the year, everyone seems to be on vacation. We are getting a few things buttoned up for the building plan submittal (mechanical/electrical/plumbing and soldier piles/tie-backs) but should be prepped for submittal in a couple of weeks
– We took the project off the market until after the new year, and will re-list it so the listing looks fresh. I believe we will get a lot of action with a lower price, and could drive the price up.
– I have a meeting with a potential buyer this week, they have seen the site and are interested
– The mechanical/electrical/plumbing plans are being completed. Structural engineer has done all the work except the soldier piles and tie-backs for the retaining walls exceeding 8 feet. I am getting another engineer on board for this work. Once that has been completed, we are ready to submit for building plan check. We have re-submitted our corrections for grading plan check and expect to hear back from them in the next couple weeks.
– I have been working with Matt Weaver regarding the sale, and it is slow season for developers. Everyone seems to say the same thing, that they would like to talk after the 1st of the year. I have one interested party from Orange County circling at the moment.
– I believe the best strategy right now would be to pull the listing for the rest of the year, and then re-list it beginning in January at around $850,000 so it has a fresh market time. I spoke with Matt Weaver and he agrees that this strategy is a good one. He has someone calling about it every day, and mentioned that one of the potentials is driving by the property tomorrow, but it would serve us well to take this approach. Those who know about it will still work their due diligence.
– After meeting with John and Kevin at their office, Kevin had a good point that in some cases, he would rather start with a lower list price and let the market drive up the price with activity, rather than force the market up to our price. This is the approach we would like to take.
Not a whole lot to update on, as most of the work is done.
– The mechanical-electrical-plumbing plans are being done right now. Structural is nearly complete. We are nearing building plan submittal.
– The engineering firm for the grading plan is taking a little longer on their corrections than we would like, but it’s not putting us behind.
– Thanksgiving week is typically very slow in this industry, nobody really does anything. A number of the potential buyers showing interest are holding off until after the holidays.
– We have lowered asking to $925,000. While we were getting interest on the open market, it wasn’t as much serious action as he would’ve liked, so we made a move to lower asking in an attempt to generate a little more activity.
– We have completed our corrections for grading plan check. We are waiting for structural and civil to complete their corrections for our re-submittal.
– The project is being marketed and receiving lots of interest, according to the listing broker. We have received 2 LOIs, and countered both.
– The most recent offered 850k, and we countered last week to 910k. After driving the property with their equity partners, they decided to counter with 700k, which obviously isn’t even close. So we are moving on to other groups.
– We still have plenty of time until building plan check is completed and are still ahead of any potential buyer who will require a 45-60 contingency period before waiving contingencies.
– We have completed electrical, mechanical and plumbing plans, just waiting for sign off. – Structural engineer has started work on the buildings and retaining walls.
– Once we get both of these back, we will be ready to submit to building plan check.
– We received the plans back from grading plan check and are working on the corrections and revisions for the second submittal. – – – The vast majority of the corrections are The project has been listed on MLS and has received numerous significant inquiries.
We have received two offers/LOIs in the past week or so:
– The first is a Letter of Intent for $850,000, with terms we didn’t particularly like, such as a payment out of escrow of $50,000 to a third party construction management/analysis firm, essentially dropping the offer to $800,000. I countered with $900,000, and omitted the $50,000 payment to the third party company. I have been told by the agents in charge that their clients are doing some more DD, and are definitely still interested but need a few days.
– The second is a Joint Venture offer from George Flint and his associates. Per their projections, we would get over $1M in net proceeds at the end of construction and sale of the completed project. We determined that the $100,000 or so of extra profit didn’t justify the extra time and risk associated with construction. If we wanted to wait out the construction period and flip the finished product, we could just as easily build it ourselves.
– While the offers aren’t quite what we are looking for, it shows that this project is very marketable, and with the very limited exposure we have gotten for this project, we have dozens of nibbles and two solid bites. It should breed optimism that this project will sell once listed, which brings me to my next point:
– I have signed a listing agreement with Lee & Associates to get the project out there and exposed to the masses. Not only will they list it to the MLS, but they will actively pursue buyers within their network and also send the project out in an email to their database of over 1,000 buyers, developers, builders, and other real estate professionals across the nation to generate interest. I am certain this project will sell in short order.
– The project progress is ongoing, with grading plan check nearly in the books, we are just awaiting the comments from the City to do the corrections and resubmit. The structural engineer is completing the lateral load calculations for the retaining walls and structures so we may be ready to submit for building plan check in short order. By the time a buyer has entered into escrow, completed due diligence, and waived contingencies, we will have either secured building permits or be very close to securing them.
– We have finished everything needed for grading plan check, and I am in for a pre-submittal conference today to get ready to submit. Once I complete the conference, in which they look over the plans to make sure we have everything we need, I schedule an appointment with the planners to get in for plan check.
– The deposit to get the work going will be due at that time. We can make the deposit online, I will send the invoice at that time. – I have moved ahead with a structural engineer for the load calculations of the retaining walls and buildings. This is required for building plan check. We have a call with him scheduled tomorrow morning, and he will require a deposit to get started, so I will send that when we sign the contract.
– George Flint and his associates have completed their due diligence and reached out to their key investors regarding this deal, and intend to submit an offer shortly. An associate from Orange County has told me he expects an LOI this week, hopefully by Wednesday. I have also set up a tentative meeting with my land broker at the site for Wednesday or Thursday, in which we will get the ball rolling on listing the project.
– After a few weeks of delay from BWE, the Civil Engineering firm in charge of Storm Water work, we have finally received the BMPs and details so we can input them into our grading plan for submittal. We are still waiting for the various reports from them (water quality report, drainage study, etc.). BWE is very highly regarded, and so far as I’ve seen, they produce very high quality work product, but they have taken longer than promised and, rather than start over with another firm, I chose to give them the time to complete the work in the interest of maintaining positive relations and not risking further setbacks.
– I am hesitant to predict a submittal date, but it is my intent to have submitted within the next week or so. This will require a number of documents from EAC such as title policy, authorization documents, and deposit agreement, among others. I will provide a list of these shortly so EAC can begin rounding these documents together.
– I have put the time to good use by consulting with structural engineers regarding the building plans, going to bid regarding the landscaping and site work to assist potential buyers, and analyzing building costs which will be helpful in the marketing of this project. We are progressing with our building plans, and will be ready for building plan check as soon as we hear back from the City that there will not be any major revisions required from grading plan check.
– While many parties have shown interest and buyer activity has been heating up, I have not yet received an actual offer. As I have mentioned, I intended to list this property if we haven’t yet received an offer. However, my listing broker recommended that we wait until the project is actually in grading plan check before listing it for sale on MLS. Until that point, I will work with the currently interested parties to put together an offer. When we have submitted, I will then revisit turning the project over to the broker and letting them list it and handle the buyers.
– In the smaller context, we are slightly behind where we planned, and hoped, we would be due to the delays in storm water work. In the larger context, we are progressing at a very rapid pace compared to other developers. None of these delays affect our ability to sell this project. Other than the small hiccup with the engineering firm in charge of storm water work, I am very happy with the progress we are making and anticipate a quick turn around once we are in grading plan check.
Date of Purchase