Looking at my first, what to do next?

3 Replies

I was going through realtor.com and found a property for $12,500. Based on the pictures, it's definitely a fixer-upper (the majority being the basement). Going through a county website (Lucas County AREIS), the last sale was in 2013 for $39,000. If I understand the data field for Taxes and Values correctly, it could sell for $50,000. Current taxes due are $1,349.12. The neighborhood is listed as static (not improving, but not in decline). When I checked it out on my smartphones map app, I found it's in a neighborhood I used to work in and is a few blocks from the University of Toledo.

I don't have the money for it, but I also see an opportunity to either fix/flip or fix/rent to college students. Any recommendations?

Hi Michael, a better way to use AREIS is to pull up the "Sales Report" (in red letters near the bottom of the list on the left side of the page under the "Data" tab).  Sort by Sales Date, don't include condos unless you are nuts and looking at condos. When you are looking at the report you should only consider properties that sold with a General Warranty deed, "GW", as those will be your most likely suspects for arms-length transactions. Do not consider SD (Sheriff Deed), FD (Fiduciary Deed), SD (Special Warranty Deed) or QC (Quit Claim Deed). Those are either foreclosure sales (SD, FD, SD), or if it's QC it could be a number of things but is often not an arm's length transaction. 

I wouldn't care too much about the tax value because tax values are not detailed appraisals, nor would  care how much the property last sold for because you will have no way of knowing the details of that sale (did grandma sell it to her grandson for cheap, or did the former buyers pay way too much because their mother lived next door and they really wanted to live next to her no matter what, or it could have been a foreclosure, etc.).

Also, the areas around UT are hit or miss, but the hits are usually pretty good. You can often sell to the parents of a UT student who want the house for their kid to live in while they are at school. But again, you have to be on the right streets.

Michael, a couple things to keep in mind.  Realtor.com a lot of times (at least in my area) has old listings that may be already pending or sold.  I would suggest working with an investor-friendly Realtor that you are comfortable with who can set up a daily email feed with the hotsheet listings based on your buying criteria.

The other thing I would point out is that if a property is not already pending on the MLS after the first few days of investor bids, then it is probably not a great deal. A house listed for $12,500 likely has some pretty major/expensive things wrong with it (foundation/roof/mold/etc.). If you are considering buy and hold, I would suggest starting with a light cosmetic rehab instead of a huge project.

Thanks. I looked into that, it was listed as a SD. I suspect there's more going on than what I know to look for at the moment. So, the natural inexperienced question is why it shouldn't be considered.

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