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 J. 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 :)
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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