Purchasing a gut rehab

5 Replies

Hello BP members, I have been doing some research on here about my situation and I have not been able to find anything that is exactly like what I have going on.  I apologize if I have blatantly missed  another post that has this info already. Any insight would be greatly appreciated thanks in advance.  Here we go....

My wife and I are trying to sell our house currently and I have been looking around at a few house in our area and have come across one that looks promising.  I have been back in forth with different scenarios that we could do in order to accomplish purchasing this house but I am sort of stuck.  

When our current house sells we will walk away with hopefully 30k in profit.  

The house that I am looking at is bank owned, on the market for 127k. I walked through it the other day and it is a complete gut rehab. I would conservatively estimate rehab costs of about 60-70k. The ARV for this house conservatively would be about 190k.

This house has been on the market for 100+ days, has been empty since 2011 and I am hoping to offer around 70k for the house.  It is a 4 bd 2.5 bath.

My conundrum is how do I go about purchasing this house with a renovation tied in with no money down until my house sells.  Aside from just waiting until my house sells in order to get traditional financing I wondered if there were any tricks of the trade out there that could help me.  

Also the house is not in FHA livable standards so FHA/203k loan is out of the question.

Thank you very much to all input.   

Every house you see does not have to work. This one at listing price will make you no profit. The only way to make any profit is to get the price lowered. Unless you can get it lowered by 40 + I don't think it would be worth it. Find a better deal. You never know what unexpected expenses will come up.

@Timothy Brubaker

 Thank you for the input, I do have a construction background and I did a pretty extensive inspection when i was there the other day.  I am comfortable with the renovation number. That being said, in your experience how likely is it that I will be able to get this property for 40k+ below asking?  

You can generally about 50% of the time get it 20% off list price if its been on market for a while and its bank owned.

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