Would any of you consider the following property a possible investment deal?
SFR in Metro Phoenix, AZ. 3 beds (plus a Den that could easily be turned into a 4th) 2 full baths, formal living room/dinig room, kitchen opens to another dining area and family room, 1270 sq ft. Built in 1998 in a planned community with an elementary school and High School within the neighborhood. It needs some cosmetic updates: flooring, countertops, appliances, paint, replacing a few roof tiles. In general the property is well kept and it would be move in ready with just some minor repairs. Low-maintenance, well maintained desert landscape.
Sale price $200,000 firm, Possible ARV $255,000 (sale price of a nice rehab in the neighborhood). As-Is, Cash or Hard Money offers only. Annual Property tax about $1,200.
I appreciate the input.
@Michelle Ayala It sounds like around $7500 worth of repairs in what you listed, maybe more depending on quality of finishes. How much will it rent for? Would you self manage from a distance or hire a PM?
@Michelle Ayala Really dumb question here, why it is "as is", cash-only, etc. if it's just some cosmetic sprucing up? From what you're saying it's not like the property wouldn't qualify for conventional financing. I would imagine that I'm missing some piece of the deal here.
Taking that aside, you didn't say if you want to flip it or rent it out. If you rent it out, well, you didn't put the rent in there. If you want to flip it then it's $250K - 10%ish (closing costs, realtor fees, etc.) so that's $225K and then you subtract out all of the updates and holding costs. It doesn't sound like you'd have to hold the property for a long time and if you're doing a cash-deal there's no mortgage to pay but it still doesn't sound like there's a ton of spread here.
And you can take on that a few round-trip plane tickets, hotel stays, etc. for you since you're doing this deal and living in Wisconsin!
If you don't want to do the flip and just have it managed for your in Phoenix, well, we're back to need to know the rent level, expenses, blah blah blah.
It sounds like around $10-13k for rehab to me ($2500 paint, $2000 countertops, $1500 appliances, $4000 flooring, then the misc. like fixtures, fans, roof tiles etc)
That puts it around an 83% or so deal which isn't terrible for Phoenix if it's cosmetic only in an area with low DOM, but there won't be a very large spread. If you're going through a realtor to purchase it that realtor should be giving you a discounted listing on the resale so that should save you a % or so.
If you want to PM me I can comp it for you if you want another set of eyes on it
Well, you can't make money on it as a rental. You can't make money on it as a flip. What else is left there? lol
@Joe Splitrock , @Andrew Johnson , @Dustin P. , and @Ben Leybovich thanks for responding to my post. I probably should've been more specific. I actually own the property in question. I was considering selling it for $200k as-is and was wondering if at that price it would be an attractive deal for investors out there, either for a rental or a quick flip. Based on my initial research, the property will rent for $1450, but at this point I have decided to put the money into it and list it on the MLS. If you have any recommendation for a reliable, investor-friendly GC or Skilled Handyman in the east valley, please let me know.
Originally posted by @Michelle Ayala :
@Joe Splitrock, @Andrew Johnson , @Dustin P. , and @Ben Leybovich thanks for responding to my post. I probably should've been more specific. I actually own the property in question. I was considering selling it for $200k as-is and was wondering if at that price it would be an attractive deal for investors out there, either for a rental or a quick flip. Based on my initial research, the property will rent for $1450, but at this point I have decided to put the money into it and list it on the MLS. If you have any recommendation for a reliable, investor-friendly GC or Skilled Handyman in the east valley, please let me know.
Most investors will not be interested in a SFR that sells for $200K and rents for $1450. It is not a really great return for that area. You will get more money selling it to an owner occupied. I would fix it up a little bit and list it for $225K since you said that was the ARV.
Thanks @Joe Splitrock . ARV is actualy $255k, not $225k. So even better :)
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