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.

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

Lock We hate spam just as much as you

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here