I found a motivated seller of a SFR 3/1 that needs 15k to rehab. He's asking for 8k. Doing my due diligence I find the owner owes 8700 in back taxes due to be sold in August I this year if taxes aren't paid. What should I offer on a deal like this?
What are the comps? Have you had multiple contractors confirm a 15k bid for the work?
You can probably just agree to pay the back taxes at closing so he is rid of a headache and you get a property.
@Eddie Werner I found out there is also a sewer lean for a couple thousand on the property. Quitclaiming property to me and set a up a payment plan with sewer company and will walk away with prop under 12k. ARV is about 58k.
Former union carpenter with lots of experience estimating repair cost so I'm pretty comfortable with my skill level in this area.
Thanks for the feedback.
Many variables to answer that question fully..... The main one being are you going to flip or rent? Under my calculations if the ARV is $60k or so and it only needs $15k then it would be a good deal as is even with the back taxes as a flip. I would talk it down further as that is his starting numbers and he will lose the house if taxes aren't paid, so there is a strong motivation to sell quickly. So for a flip it's a good deal where is so anything further will be icing on the cake.
Also I understand you are a carpenter but I would really iron out the sow estimation. $15k is really low and would suggest to me that there is nothing wrong with the house and would only need cosmetic upgrades to get it retail ready. Demo, new appliances, carpet, paint, cabinets, granite, fixtures, update of bathrooms would run me $15k alone.
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