Let's make a Deal or Don't?

3 Replies

Before I take the plunge, tell me if you'd invest in this property for buy & hold. I'm in the DFW area. I have an opportunity to purchase a home in the Oak Cliff area of Dallas for 50k.  Foundation appear to be great while walking through and roof  is about 3-4 years old. . The house is in an estate which they are wanting to sell to settle debts of deceased parent.  House has been sitting empty for a few years. Appears to need mostly cosmetic stuff. Painting, new flooring and updating n kitchen, updating all around. It was built in 1939. I guesstimate rehab should be about 10-15k. It's an old tudor style home near the Dallas Zoo, 5 minutes from Downtown and I think I could probably get $900+ or better for rent. My biggest concern is annual property taxes  are about $1500 year according to DCAD and insurance may be about the same.   There's a lot of changes going on near this area. Bishop Arts, Deck Park & Bullet Train (maybe).  Comps near this  property that have been fully rehabbed have sold for up to 180K. There's one next street over that is currently on the market for $220k.  I'm not good with the 1%, 2% stuff so help me out with the numbers. Thinking of paying cash & getting $ out after seasoning.  Deal or Don't?

Deal.... If you don't want it.  I will happily buy it.

If you do buy it... double your rehab budget.

You may not need to spend it right away but that first year with a tenant in it, I bet a fair number of unforeseen repairs will start showing up.

@Val Jaz If your numbers are accurate, buy it.  I have bought similar deals in a different area and my thoughts are:

rehab estimate seems low for a house sitting empty for years

Insurance estimate may be a little high

Property taxes seem reasonable

Did you walk it with a contractor and have a realtor pull comps?

Get good with the 1% and 2% stuff :)

Good luck!

The 1%, 2% stuff are just rules-of-thumb to see if deals are worth looking into further. Sounds like this one is pretty solid, especially since you plan on doing a cash transaction which removes the risk/pressure of mortgage payments. I could help you with the numbers in more detail if you'd like, just send me a message.

If you're planning to flip it after seasoning, then it sounds like it wouldn't be rented out at all. Short-term renting it is an option, but that particular area isn't a hot market for it and it would require a lot of time to manage.

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