Single family home in forclosure, 125k with 40k in repair.

5 Replies

Am contemplating placing a bid for a foreclosure single family home. It needs complete rehab, about 40k and the home price is 125k. It has 4 bedrooms and 2 1/2 bath. One room could be turned into 2 and its a walk away from a park that also has a jogging trail and lake and 3 min from highway. The neighborhood is quiet, middle class but about a mile away it's a little more hectic and I would assume the crime rate is a bit higher. I plan to use it as an investment property. Tax is about 8k and rent cost in the area is about 1300 for a 2 bedroom. 

In anyone's opinion, would  this be good investment?

Is the asking price $125K, or is the FMV $125K. Are there any outstanding liens, is it sold free and clear? How solid is the rehab cost?

Well, you've posted rent for a 2br, but this is a four- maybe five as you've mentioned. What would it rent for? You need apples to apples comps. What is your goal with this property and investing in general?

What will it be worth after rehab? What will it rent for? The quiet neighborhood, park, etc  is irrelevant as part of a decision to buy, unless you are going to live in it. 

As others have indicated you have not provided enough information for us to make a assessment. If you want advice you must be forthcoming with all financial information.

To start you can not expect us to evaluate potential with market rents on a property that has no comparison to th eone in question. 

First, thank you all for responding to my post, i really appreciate it. Sorry for not providing enough information but am bit of a novice. My Goal is to keep it as an asset and rent for around 2,300 per month and this number is base on a smaller 3 bedroom room house that was recently rented for 2000 3 houses down on the same street, sorry that's all i could find in such a short time . I had an electrician and a general contractor do a walk through. They estimate the total rehab to be between 30k and 40k on the high side. Myself and some friends will perform the demolition work to save some cash. The asking price is 125k, I plan to put in an offer of 95k but willing to offer up to 105. I plan to make this offer assuming the interest rate is around 4.4% on a 30year fixed rate. Closing cost is expected to be around 6,500. The ARV is estimated to be between 185k and 200. The lot size is 5000 sq ft and the average home value for properties in the area is 219k for a home this size.

I assume that since I will be performing almost a compete rehab, operating expenses should be relatively low in the first year or two. Tenant will pay their own utilities and I will be responsible for water pollution.  

Please let me know what I missed.

Thanks in advance to all of you.

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