Rental Property Investor · Wilmington, NC · Member since 2017 · 27 posts · 13 votes
A 1,432 sqft, 3 bed / 2 bath single family home was just listed today in an area that rents for around $1,200 a month. It has a market value of $120k-$150k but was listed for $50k because it "will need plumbing repairs". Is this something you would still consider getting under contract, and getting inspected? Or would you steer clear entirely?
Investor · Orange County, CA · Member since 2015 · 2k+ posts · 3k+ votes
9y
What plumbing repairs are needed and how much will they cost? What other repairs are needed to get it up to market value and how much will they cost? What sort of discounts are flippers in the neighborhood getting for properties that need some work?
Rental Property Investor · Wilmington, NC · Member since 2017 · 27 posts · 13 votes
9y
@David Faulkner I went to check the house out early the next morning and happened to catch the listing buyer and the guy who (already) had it under contract. Turns out a wholesaler already had it under contract for a short sale and were just listing it to fulfil the formality. But great points you made! Thanks for the reply!
Investor · Philadelphia, PA · Member since 2016 · 2k+ posts · 1k+ votes
9y
All comes down to the analysis. You could easily put $15-20K into plumbing (undergoing, under-slab) but it would still be a good investment.
Most 'standard' buyers aren't going to want to go through the hassle. But if you have the money and a good plumber, it sounds reasonable.
No idea though what else is required to make it rent or sale ready.
San Jose, CA · Member since 2017 · 75 posts · 42 votes
9y
You should be able to get seller’s disclosure before getting into contract. The disclosure should list out problems that seller is aware of.
Otherwise, if you think the deal is solid I would lock it up in contract and have a plumber come out to assess the problem. Probably only cost $30-50 to get an estimate. That’s money well spent in my opinion
@David Faulkner I went to check the house out early the next morning and happened to catch the listing buyer and the guy who (already) had it under contract. Turns out a wholesaler already had it under contract for a short sale and were just listing it to fulfil the formality. But great points you made! Thanks for the reply!
I'm sure the buyer is an investor ... ask him if you can tag along on the deal and help out here and there ... check in on the job site from time to time and take pictures for him, run to home depot, etc. Then you can get the answers to all the questions I asked and see what an investor deal looks like from the inside out. Or else, the worst that could happen is he could say no.