To take the RISK or not to take the risk... that is the question???
I found a property up for auction this week and would welcome advise from experienced investors. Here are the bullet points:
- 3Bed/2Bath (1,164/SF)
- Cash only offers and being sold As is, where is
- last bid $55,000
- Buyer is responsible for escrow ($850-$1,375) and Title ($500-$1,500)
- Comps- $150,000-$135,000
- Currently occupied!
Assumptions: I would assume the ARV to be $130,000 (conservative, I know), $70,000 max purchase price, M&R reserve of 2%, Capital Expenditures Reserve of 3%, 10% vacancy and 180 day hold period.
I have access to private money that could make this financially viable. I could either buy and hold this property (rents would be between $1,200-$1,400) or flip the property.
Is this deal too risky because I'm not able to complete a walk-through of the property to determine the repair costs?