Is this purchase worth it?

7 Replies

I have a property I have an interest in which is a single family home to be used as a college rental, but not sure if the numbers work.

They are Asking 179900

2 bed 2 full bath (trying to get it back to three bedroom)

1694 sq ft

House needs support beam replaced or at least jacked up and supported better. Can feel uneven floor in kitchen area.

House is a Cape that was changed over the years. Entry into second floor has low overhead and a poor layout. They added a nice master bedroom but "killed" one bedroom to do it. You need to walk through, what once was a bedroom, to get to master bedroom hallway. The second floor has poor layout and a low pitched room which takes a lot of space from existing bedroom

I want to remove and raise the roof to give a normal height ceiling. Redo the layout of second floor to get back the lost bedroom.

The house has a septic system but upon examination it is pretty much at the end of life.

The construction cost I have an estimate of 25,000 plus another 10000-12000 for new septic system.

Then there will be siding costs..unknown at his time.

City appraisal from tax Department is 159500

Assessed at 111650

The question I have is how to work the numbers to make an offer to make it worth while.

Any advice or help will be appreciated.

Thank You

Are you doing anything else in the rehab such as kitchens, baths, flooring? Because $25,000 in CT won't get you very far on a rehab if you're talking about repitching a roof and completely changing a floor plan. Have you received actual bids from contractors yet?

@Bob O'Neill , the town appraisals and assesment tell you nothing. If you're using that to base ARV, you're in for trouble.

@Bill Goodland , is right. You'll never get all that work done for $25k. If anything is out of code, the town will expect you to update. Definitely on the 2nd floor, but perhaps the whole house.

What do you think the place will rent for?

You need to get solid reno and ARV numbers. Even when you get them, I doubt you'll be able to buy this for a price that makes it work. The odd layout isn't "distress," so how are you going to negotiate a price that makes sense to fix it.

@Jaysen Medhurst Thank you for your response.You are right that 25000 is not enough. The 25000 is only for rip, raise walls ,and reroof plus modify layout.

Thanks for the reminder that once I open up the walls I will need to change things to current code.

The kitchen and baths are OK and in working order. Rents I found are between 1600 and 2000 at the high end.

The Arv is estimated to be 230000.

The owner is wanting to sell,but with these issues what could I possibly offer without totally insulting him but still protect me?

Thanks again..

@Bob O'Neill how many large rehab deals have you done before? I might try to bring in a partner if you’re having trouble even deciding what to offer on this property because the margins seem extremely thin. If you don’t think you can bring in an experienced partner or feel too inexperienced to make an educated offer and rehab estimates I’d pass entirely on the project