What is wrong with this house?

Question

Hi everyone,

I am new here and first I want to say that this whole site has been incredibly helpful for me getting started. I'm looking for my first investment and I'm having terrible finding an undervalued property but I think I finally found one! I'm convinced there must be something wrong with it that I'm not seeing for it to be so low and to still be on the market so many days later. I've been super busy at work and haven't gotten a chance to tour it but I did drive by last night after work and the roof looked good and it appeared to be well kept. My plan would be to use it as a rental. Maybe a BRRRR situation? Tell me what you think!

What do you think of this 3 bds • 2 ba • 2,144 sqft home I found on Zillow? https://www.zillow.com/homedetails/74890423_zpid/

Jason Hirko · Answer

@Brandi Peterman Looks like they are trying to unload it. They listed it 3 weeks ago, and dropped the price 20% a week ago. I'd take a vacation day from work and go look at the house (with a contractor if possible). It could be a great deal if you move fast. Could also be a turd. You won't know until you go. Everything else will be conjecture until then!

Good luck!

Brian Pulaski · Answer

I do not know the area at all, but just by Zillow and changing the criteria to show sold properties in the last 12 months, it looks like houses in the surrounding blocks are mostly $130-150k ready to go (not fully rehabbed to be top notch). My guess is there needs to be $40-60k in rehab needed and there is no money to be made.

With that said I have made two deals on MLS listed houses that were on for a long time. One was listed at $90k for some time. They dropped to $85k and it was still listed. I looked, offered $80k and after a few months renovating made $30k in profit. Another was listed forever, starting at $275k and was down to $175k when I called. It needed some foundation work that scared everyone away. The day it dropped to $165k and I had a foundation proposal near $30k they accepted $110k. I ended up making $75k profit on that one.

Schedule a walk through and really knock down the ARV on it. You never know why a house hasn't been scooped up by someone else, however I would NEVER pass on looking at a house that fit my criteria, just because it was on the market so long.