I got a call from an extremely motivated seller in Kansas city. He said he wants to sell today and the property is $1,500.
It sounds scammy (I'm not sure) but out of curiosity though, is it possible that a 1br/1bth house can sell for less than $10k in kansas city?
Unless you have a team on the ground in Kansas City, it would be hard to know exactly what you're buying. What are you planning to do with the property if acquired? Long distance rental, fix and flip, turnkey rental to resell to other investors? You can use Rentometer to find out what the property would rent for. A check on Realtor.com or Zillow.com might help. I also can recommend using Eppraisal.com to get an idea of value. Be sure you check the tax status of the property to make sure it is current. At that price point, I doubt there are HOA issues to be worried about. There may be fines that are due on the property for violations and that should be checked as well. Look forward to hearing more from those in KC.
We have properties available in KC between 32k-55k so is definitely possible to find deals.
@Cindy Szponder That's exactly my problem, I don't have a team on ground, I posted adverts only for phoenix homes.
@Jason Hawk How can I find a possible estimate. I've tried Zillow, realtor, redfin, realqest etc... I can't find any listed homes near it. 2615 N 8th st., Kansas city. It must be a long time since anyone living on that street sold anything.....
Is the address in Kansas City, KS? The county appraises that at $0, which I've never actually seen before.
@Sandi Hague Yes definitely, it is in Kansas City.
@Amaka Nzenaguora I did a quick and dirty report using RPR through my MLS. You can see the report at http://app.getrefm.com/#/share/transaction-runs/57...
RPR assumes a $34k value and purchase price. Doesn't sound like that is realistic. Perhaps the owner is looking to avoid a foreclosure? Or the property is already set to go to auction and he's trying to get some cash?
Looks like the rent for that area is around $500. A lot depends on the status of the property. Is it livable/rentable. You can ask the owner when was the last time certain items were replaced like roof, water tank, furnace, A/C. Check when was the last time the kitchen and baths were updated. Is there wallpaper. It looks like the taxes on it are under $100 a year. Rentometer didn't find rentals in the immediate neighborhood but within a mile, so the $500 is a rough estimate.
I know that Kansas City, KS used to be a bit of a rough area but that was years ago. I don't know the current status there. Hope a lot of KC people chime in here.
Well, He did say the house was gutted. It's been vacant, so fixing it up will certainly take a lot of cash, I think.
I asked him to estimate the costs and he said maybe $3,000. So total cost $4,500?
@Cindy Szponder Also, there's a vacant lot next to the house....so it's 2 properties instead of 1.
All possible data
Amaka, Have you looked it up on the county site? Enter the address in the Treasurer's Department page and the Appraiser's page. Looks like it is considered uninhabitable and was purchased with other properties in 2014 for a grand total of $1,500.
@Amaka Nzenaguora it's on 8th off quindaro Blvd. it's very possible it's 1500. That's a rough area. Be tough doing anything with that being out of state. Just out of curiosity I'll drive out there in the morning and look at it for ya.
@Sandi Hague I'll look again
@Steve Ipock Thanks for looking at it.
I've seen houses in KC sell for next to nothing, but they're almost always in bad areas and in rough areas. 2615 N 8th st is a pretty rough area so unless you feel comfortable investing in those types of areas, I would be very careful. You tend to rehab out your equity very fast and it's hard to cash flow because the rent is low and erratic.
@Amaka Nzenaguora I have sold several houses in Kansas City for under $2k. I can assure you that a $1500 house will require WAY MORE than $3000 to fix up! If it is "gutted" you will spend AT LEAST $25,000 fixing it up, and that is being very optimistic. You are probably looking at closer to $40k to get it livable.
You need to run away from this property! Run fast! It is a money pit!!
@Amaka Nzenaguora it is semi boarded up. Has a sign in the window that it's unfit. Once Kck has their nose in something it will be an uphill battle to win them over.
Really rough part of town and they're definitely not being honest with you if they're saying $3000 on a gutted house. That's already two red flags.
@Amaka Nzenaguora You can find homes in these areas that do not need work for 15k. It should be obvious that it will cost more than 3k to rehab a gutted house. If you ever have questions about the kc area, you can always send me a message.
Thanks everyone for all your help.