HOME REALTY SOLUTIONS, INC.
Acquisition Division, MarketSmart Properties, LLC
P. O. Box 1865
Cave Creek, AZ 85327
Mobile: 480-220-0401 Fax # 480-575-0468 Phone: 480-575-0285 E-mail:
March6, 2012
JUSTIFICATION LETTER IN SUPPORT OF
PURCHASE SHORT SALE CONTRACT FOR CASH WITH POF LETTER
FOR 1348 E. COLTER ST. PHOENIX, AZ. 85014
To Whom It May Concern:
The subject property was built in 1950. This property has been vacant for at least 1 year+ and has been listed for sale as a short sale for several months. It is located in North Central Phoenix in zip code 85014 in an area known as Sherwood Village.
The undersigned is familiar with the neighborhood in which the subject property is located. The majority of the homes located there were in the majority built between the 1950’s and the 1970’s. The vast majority of these are a good mix of owner/occupied and rental properties. Most are well maintained and show price of ownership. At one time this property did show pride of ownership. At this time, due to a variety of factors, a preview of the property revealed at least the following rehab, remodel, health code violations. The latter were demonstrated by the presence of discarded syringes on the kitchen floor, as well as in other rooms. After contact with a random selection of neighbors, the undisputed history is this property was used, once it became vacant, as a shelter for drug users and other unwanted occupants.
The undersigned, accompanied by members of our property inspection team were physically present at the property after having made prior arrangements with the listing agent for lawful access to the property. This inspection was initially intended to expedite and shorten the inspection period, as well as abbreviate the then anticipated closing by at least two (2) weeks at that time. We had expected to see and had budgeted for a property purchase for a rental that would require roughly $3,000 to $3,500 to get the property in “rentable” condition. In fact, the budget was $5,000 allowing for unforeseen contingencies. Suffice it to say that what we saw last Friday, March 2nd as shown by the attached photos as well as this letter in fact reveals an uninhabitable property that presents in its current state, a health risk for anyone who is going to occupy the property, not to mention those people who are going to rehab and remodel it.
Below you will find an illustrative and by no means exhaustive list of the most pressing items that require attention in order to make this property habitable for anyone:
1.Exhaust pipe from the only bathroom is blocked with unknown object(s) that prevents clear access of air into plumbing--this will prevent toilets from flushing with proper pressure--the cost to fix is not presently know;
2. Four significant separate communicating cracks in the front west corner bedroom on 2 of the 4 walls. Three of those cracks going to thesouthwestcorner of that room. We doubt these are cosmetic in nature--that means inspection as well as additional cost and project delay potential issues. (see photos showing clearly , these are NOT all cosmetic cracks.
3. No stove in kitchen nor refrigerator;
4.The "garage" is not a garage, It is a non-permitted make over of a garage or car-port with a side and garage door added. (It currently has only three sides with the garage door counting as one of those sides)
5. AC/Heating needs fix up or replaced. The main electric box will likely need to be replaced with a 200 amp box. The existing box is so outdated and “rigged” that is difficult since there was no power at the house to determine if that box was ever upgraded in any way;
6. With a gas based system of this nature (we saw several yellow flags stakes in the back yard leading from the north fence and alley going south to the house main connection from Southwest Gas) this area will be trenched out by Southwest Gas at some time in the future to repair whatever gas related issues are present.
7. There is a high probability from of contractor that based on a visual exam of the interior gas heating unit, that an odor of some kind was emitted from the duct/vents. This was borne out by the unusual number of "small perfume type devices” attached to almost every vent grill in the house. The exact source of that odor is not now known--but the issue must be eliminated for safety and for getting a decent rent.
8.There is an active water leak in the north alley that has already been staked by water, electric and gas color codes (timing of a fix by them for this is not known)
9.The laundry room is for sure not permitted as code violations are present (electric and plumbing) and will require a non-cosmetic fix, due to an attempt to build a bathroom in the proximity of that area, although nothing of the kind exists at this time.
NOTE SEE ATTACHED PHOTOS THAT VALIDATE THE ABOVE STATEMENTS
This property is not habitable without the expenditure of 25k---based on what I saw and was told by our experienced inspection team. Our initial analysis of 5k (including a 12% buffer) to get the property in rentable condition is no longer an option. To make the property legally compliant at a minimum, from a habitability standpoint that 25k is a solid number for the rehab project.
Based on the foregoing, Market Smart Properties LLC is prepared to pay 65,000 cash for the purchase of this property subject to those terms already agreed upon and approved.
This letter of justification and attached supporting photos, is offered and presented in good faith. It is anticipated that the Loss Mitigaton Servicers’ Negotiator will review its contents promptly and in the same good faith as it is presented so as to permit a close of escrow on or before the usual and customary approval process.
Yours truly,
Home Realty Solutions, Inc
______
Barry Hart
See Photos attached.
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