WOW! Both units delivered vacant!
In the current world of rent control, having a duplex delivered vacant is very desirable. But finding a property with upside potential is even better.
Most buyers prefer an added value opportunity. This duplex property has that: one unit has been renovated and updated in a vintage style that suits not only the property but also the “vibe” of South Pasadena. The second unit was in the process of being renovated in the same style by the owner but he passed away before it was finished.
So the buyer can complete it and add the “pretty” details that will make it unique. The value add is two-fold: the ability to pick out the finishes and finish this project quickly while having income by renting out the fully renovated, move-in ready back unit at 1500 Hope Street. Plus the property will be worth more when it is finished.
The challenge here is that the property is not mortgageable in its current condition in the current loan environment. The true target buyer here is an end-user, someone who wants to live in this excellent location that is close to everything special to South Pasadena: shops, restaurants, the Metro. And it’s all one level. It would be perfect for an extended family or someone wanting the schools who needed the additional income from the second unit to qualify for a loan. But alas those options are not available due to the unfinished condition of this property. So it severely limits the buyer pool.
An end user will always pay more than an investor for a property. Investors haven’t shown any interest. The solution would seem to be to fix up the front unit. However this is a Probate sale and doing any work would be a huge liability for the Administrator of the Estate. Some buyers were even willing to make the necessary upgrades during Escrow so that they could get a loan but that would still be a liability for the Estate: what happens if the workers don’t get paid?
So the solution was to adjust the asking price! The Administrator authorized a whopping $ 200K reduction. Not surprisingly we received multiple offers and the property is now pending.
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