There is a foreclosure for sale next to the families house. It would give us better access to the 2 acres we have and based on my numbers be a good investment on it's owe.
Here are the details :
$95,000 offer that we worked down from $109,000 the bank wanted
$1500 in closing costs - (cash deal to refi after)
$51,000 in repair cost
$2100 in taxes per year
Will rent for $1250 a month
Tenant will pay all except garbage and $50 a month.
$185,000 quick sale
$195,000 top value.
Our two concerns, one, the repairs are extensive the wiring and plumbing were completely stripped. If the repairs get too high over budget etc, it will become less profitable.
Two we have not worked with these contractors before, though they come very highly recommended and other bids were similar.
What am I not considering that I should be ? Thanks in advance.
You looking to flip or rent?
Looks like a slightly better flip to me. Cash flow is minimal, CoC is minimal as well.
With a flip it's going to be tight as well I imagine (My spreadsheets aren't set up for that).
147k total cost for $1200 in rent leaves a small margin for renting.
147k total cost and 185k arv leaves really small margin for flipping as well.
correct me if I'm missing something.
Idea was to rent. The repairs would be 20k higher to flip. ( new windows kitchen rehab etc)
Rents just are not that high in this area Spokane Wa Its a very large house 3000 sq ft. I think the limit would be 1350 for rent in that area. if all other things we fixed what would your offer be on the price of the home to made it worth it ? Our offer was 85 they countered with 95.
I see in your original post that it would give you better access to your 2 acres of land-- care to elaborate a bit more on that-- Why do you want better access, are you planning to add on to your home?
Also after repairs what is the new estimated value of the house you are thinking to purchase?
I'm not sure if this property would qualify but are you considering a K203 loan?
I've got some excel spread sheets you're more than welcome to use for buy and hold and buy and rent options...just email me at [email protected]
Thanks everyone, after your help, and reviewing the numbers, we made an offer at 85k the bank originally gave us a flat "no" then today we heard from them and they are willing to accept it. It just goes to shoe, you need to make an offer you are comfortable with as an investment, based on numbers not emotion, and be ready to let it go if the numbers were not right - we let it go and it came back. We hope to close in the next two weeks.
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