$15000 OBO, with a $2500 tax lien

14 Replies

Hello.  I found a fsbo 3bdrm 2-story house near temple university.  The seller is asking $15000 OBO and the house based on the assessment site is worth $35000.  There is a tax lien of $2500 on the property.  I can see a picture of the front and it shows the door boarded up.  The seller states that there are no electric or plumbing issues.

My question is, could this be worth pursuing or a complete no-go in your professional opinion?

Thanks

Maybe. No way to know without more info though. You need to find out what the home is actually worth, not the tax assessed value.  The tax assessor doesn't look inside a house when determining value. Will the seller let you inspect the interior? What if it was completely gutted, flooded, and/or fire damaged? You need to verify what condition it's in and what the seller is claiming for yourself. 

@Takeya Hill

Look at sold comps in that area to get a better idea of what the house is actually worth or what it could be worth. Don't go strictly off of the tax assessment website, most of the time those valuations are way off. 

You have left out the information that anyone would need to tell you if it's a deal or not. The tax assessed value is meaningless.

What is the value of the property once repaired (ARV)?

What is the cost of the repairs? 

If the ARV is $40k and it needs $40k in repairs then it's worth less than $0.

You would need appraisal and/or inspection to make educated offer, 15K sounds too high with tax lien, the next thing you know there is 1K water bill, or some other problem :), these type of houses I would make low-ball offers.

always worth pursuing until you have all the information to allow an informed decision. dont be afraid of boarded up doors or windows or liens. all the missing information is what will give you the decision if there is a deal for you. 

Originally posted by @Takeya Hill :

Hello.  I found a fsbo 3bdrm 2-story house near temple university.  The seller is asking $15000 OBO and the house based on the assessment site is worth $35000.  There is a tax lien of $2500 on the property.  I can see a picture of the front and it shows the door boarded up.  The seller states that there are no electric or plumbing issues.

My question is, could this be worth pursuing or a complete no-go in your professional opinion?

Thanks

 Here's a Zillow map of houses for rent near Temple University:

http://www.zillow.com/temple-university-philadelph...

Looks like 3 BR houses/townhomes rent for $900-$1700.  4BRs go up to and over $2000, so if you could convert an extra room to a BR, you could potentially charge up to that amount.  Not knowing the exact address nor the exact shape it will be in after you have rehabbed it, it's hard to say exactly what price this place might command.  But, you know the address and can narrow the comps to your exact location.

Depending on the cost of rehab and the property taxes (is Philly a high prop tax state?) this looks like it might have potential to cash flow well enough.  But definitely see if you can get inside.  At the least, visit the property and look around as much as you can.

Good luck!

@Isaac Essex @Randy E. @AJ Smith 

@Patrick L. @Kyle J.

@Patrick L.

You've all been very helpful.  My eyes are more open to understanding the direction I need to take.  Thank you.  Philly isn't a high tax state and I've begun looking at the comps.  Just to begin gaining some kind of experience I plan to call the seller this eve to see if it's still available and to see if I can view it over the weekend.  But first I'm going to gather as much info about the property, because as it was mentioned, there could've been a flood.....fire damage etc.  I even want to know if there is in fact room for a 4th bedroom.  Either way, I need to start getting out there :-) #trulyencouraged  #thanksforalltheadvice

Also, what are the top 3 best sites in which I should look at comps?  Thanks!

I don't place full trust in any web sites for comps ... but I check out rentometer.com to help me guage rents in the neighborhoods of my properties.  There is also at least one web site specific to my city that lists rents, though it's not as location comprehensive as I would like.  I've also called the numbers on rent signs near my houses to see what those landlords were charging.

Basically, the more rent resources you can use, the better you can guage what you should charge.

Originally posted by @Takeya Hill :

My question is, could this be worth pursuing or a complete no-go in your professional opinion?

What is the condition of the property? Until you've actually seen it, no one can give you any advice.

@Takeya Hill

 I use redfin for philly. I understand none of them are great, but at the end of the day, I need something close enough to start, so the ability to pick my own properties as comps (from a list that they provide, which admittedly, is probably not the full/best list) is good for me.

Where is the best place to obtain a list of tax distressed properties?  I went to the office of taxation in Harford County, they were no help.

So, in Phila, when the property taxes go unpaid there is a high likelihood of other liens, particularly for water/sewer and natural gas; since it's a board up, they might have code citations, and they might not have a vacant property license as required by Phila!  See link:

http://www.mcs360.com/documents/compliancedoc/VPR/...

Originally posted by @John Matthews :

@Takeya Hill

 I use redfin for philly. I understand none of them are great, but at the end of the day, I need something close enough to start, so the ability to pick my own properties as comps (from a list that they provide, which admittedly, is probably not the full/best list) is good for me.

Thanks John!  That's helpful :)

Originally posted by @Steve Babiak :

So, in Phila, when the property taxes go unpaid there is a high likelihood of other liens, particularly for water/sewer and natural gas; since it's a board up, they might have code citations, and they might not have a vacant property license as required by Phila!  See link:

http://www.mcs360.com/documents/compliancedoc/VPR/...

Wow.  I was thinking the same thing about the code violations when I saw that board up.  Okay.  Thanks for your helpful perspective Steve. 

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