BiggerPockets

I'd say that it's a very marginal deal. With the rehab, you're at 68% of the ARV. If you could sell it quickly at full retail, it would be fine. However, there is no room in there to wholesale it and you didn't provide any rent number to evaluate it as a rental.

Mike

The property is located in Houston, TX

4bd 1/1ba

It's in a mixed area some owner occupant and some renters. The current owner said he's rented the place out for as much as 975/mnth.

He said he wanted 34k I'm trying to negotiate him down to about 30k or less if possible. The owner was/is an investor himself, but he's looking to get out. As his tenants leave he sells them off. This particluar house has been vacant for a couple of years and he doesn't want to deal with it anymore. He's doing no maintenance at all.

I'm with Mike, looks good for a rental.

I would be sure you evaluate the repairs carefully. Cosmetics can eat a big chunk of that estimate. Two years empty and unmaintained in Houston heat, moisture, bugs and termites make a mess. I used to live there. But if the repairs are in line with the estimate, or even somewhat higher, this looks like a very good deal.

I'm with Jeffrey, I would verify the rental rates for that area. Look in the paper, craigslist and call some property management places in the area. Never take a sellers word on rental prices, especially if he has rented it for "AS HIGH AS $975". Sounds like a possible deal, just double check it.

Jeff

Knowing TX pretty well, I can say it most likely will NOT rent for $975 monthly. Be that as it may, as others mentioned, make sur ethe condition and the repair budget is in line with actuals. If the cost to rehab climbs too high, it makes this deal much less desirable.
If you can get it for $30k or less and spend no more than $15k in repairs, and it will rent for $800 or more, you have a decent deal as a rental, and $15k equity for a flip (of coiurse you will have resell costs and holding costs subtracted from that if you sell).