Need some advice on distressed property deal
Hey BP!
I need some advice on a course of action here.
So I had this distressed property under contract initially for 14k, thinking I could wholesale for 20k. However, upon further inspection by my partner, this place needs so much work that it likely makes more sense just to tear down and rebuild. I'm talking the works: foundation damage, a little fire damage, no main floor just joists, second floor is wobbly (structure damage), needs HVAC/plumbing/electrical, etc. My partner was looking to take it for ~10k if the numbers work for a developer, but he couldn't get in a meeting with his developer and is already preoccupied with rehabbing another property.
The seller and I already canceled the original contract due to the inspection findings. However, the seller is willing to wait for me to continue looking for a buyer or developer and will let it off his hands for 9k before we agree to another contract. So, my question is, should I call around to developers in the area for quotes to buy myself? Should I take a shot instead with buying it as-is and calling contractors to do a full rehab?
Some context:
- While I've done a lot of research the past several years, I only have one deal under my belt and I'm just starting to get into (legal and responsible) wholesaling to build up capital before I refi my first deal. Never done a demo/rebuild deal or one that needs a serious rehab like this. I don't have a lot of capital myself but have partners that do.
- Property is in central VA (Lynchburg) in a C-class, maybe D neighborhood, but will be appreciating due to its proximity to downtown.
- ARV for a full rehab would be ~70-80k based off comps. New build could likely get a little more than that.
- I live and work in northern VA so I wouldn't be able to do any rehab work myself until the summer.
I realize this is a lot, but any advice is welcome and greatly appreciated!
I need some advice on a course of action here.
So I had this distressed property under contract initially for 14k, thinking I could wholesale for 20k. However, upon further inspection by my partner, this place needs so much work that it likely makes more sense just to tear down and rebuild. I'm talking the works: foundation damage, a little fire damage, no main floor just joists, second floor is wobbly (structure damage), needs HVAC/plumbing/electrical, etc. My partner was looking to take it for ~10k if the numbers work for a developer, but he couldn't get in a meeting with his developer and is already preoccupied with rehabbing another property.
The seller and I already canceled the original contract due to the inspection findings. However, the seller is willing to wait for me to continue looking for a buyer or developer and will let it off his hands for 9k before we agree to another contract. So, my question is, should I call around to developers in the area for quotes to buy myself? Should I take a shot instead with buying it as-is and calling contractors to do a full rehab?
Some context:
- While I've done a lot of research the past several years, I only have one deal under my belt and I'm just starting to get into (legal and responsible) wholesaling to build up capital before I refi my first deal. Never done a demo/rebuild deal or one that needs a serious rehab like this. I don't have a lot of capital myself but have partners that do.
- Property is in central VA (Lynchburg) in a C-class, maybe D neighborhood, but will be appreciating due to its proximity to downtown.
- ARV for a full rehab would be ~70-80k based off comps. New build could likely get a little more than that.
- I live and work in northern VA so I wouldn't be able to do any rehab work myself until the summer.
I realize this is a lot, but any advice is welcome and greatly appreciated!