Investor · Abilene, TX · Member since 2012 · 52 posts · 5 votes
dear Bp members,
I am in the process of acquiring a property that is 50k arv but in need of 20k in repairs. The owners were wanting somewhere close to 20k. I offered 8k and they countered with 15k. We agreed verbally on 10k. What formula do buy and hold investors use? I believe that my efforts in selling this property without doing any repairs aside from pulling carpets and demoing a bathroom will be aimed at them. Also any advice on how this deal looks pls feel free and comment. I am a new investor, I am closing with cash and I appreciate any advice.
The buy and hold investor will be interested in how much income the property will generate and how much of a discount he is getting off market price. Many buy and hold investors won't be interested in a low end home that needs $20k in repairs, but a few will. Do you know how much it will rent for?
How do the repairs needed to the bathroom factor in to your numbers? It seems like it might be difficult to do a full bathroom remodel along with other repairs for $20k. If you remove the bathroom all together, does that change your arv?
To me a property that rents for $700 per month is worth about $42,000 fixed up ready to rent. A property that needs $20,000 of repairs would be worth $13,000 to $14,000.