Is this a great deal?

Question

Deal break down,

3BR/1BA
1564 SQFT
Built 1930

Asking Price: 49k(can probably get them down to 46K)
Closing Costs: 1k
HOI+Taxes:$400 a month
Rehab Costs: 5K(basically paint, could upgrade appliances and carpet)

Total Investment
56K

Comp average is 105k

Total Profit
30-40k

Looking at this for my first flip, thoughts? Please let me know if this is not enough info. The only concern I have is it was listed in 2011 for 105k, 8ok ,75k and not sold. Then it went into foreclosure and was picked up but a investor I think and they tried to sell it for 55k in December and nothing. Could there be something seriously wrong with this house and they are just keeping it a secret? Or is it a sign of the market? I was thinking of putting it up 89k after repairs are down for a quick sale.

Thanks

Julie Grupke · Answer

For SURE get an inspection!! Never forego that unless you're an inspector yourself or married to one. :)

For comps on serious considerations I pull 10 - 1/2 mile or less in last 3mo then go out to 6mo. I start on Realtor for recent sales then get more details on Zillow like DOM, orig list $ & date, prop history (price drops, taxes, etc). Don't look at the Zestimate, that's a meaningless number from who knows where....

Good luck!!

Ryan R. · Answer

So you're just going to paint it and then sell it? Sounds too easy. Why didn't the previous investor just paint and sell it for a big profit? Sounds like there are hidden factors here.

Justin Morris · Answer

So if there is only one comp that fits that profile you spelled out Julie on Realtor.com where can I go for more?

Justin Morris · Answer

Thanks Julie!! How much is an inspection?

Justin Morris · Answer

Update on this property, I talked the wholesaler who got this property from a bank two weeks ago. It seems the price drops from 2011 were when they property was in pre-foreclosure. They dropped the price once because they wanna quick sale, I think this may be worth taking a look. Thoughts?

Robert Adams · Answer

Do you have a buyer's agent? If not you should. The seller should pay their commissions so you get pro help for free. A buyer's agent should be able to walk you through the inspections, disclosures, etc to make sure you are protected and that your investment strategy (including your exit strategy) is solid.

Uwe S. · Answer

Thanks Justin, so maybe its in an higher crime zone? Do you know anyone in Phily? Who gave you the tip to this house or is this house on MLS/Realtor.com?
My first attempt is to send anyone to this house to show it. It can be an realtor/agent but even an handyman. Is there a lockbox on this house?
I know many questions but if the house not sold with all these price drops then there should be a hidden problem.

-Uwe

Justin Morris · Answer

Uwe S. It's in the Philadelphia area

Uwe S. · Answer

#1 question for me is, "Where is it located? Which town?" 
Don't think so its in NYC for this price.

-Uwe

Aubrey Putney · Answer

@Justin Morris  It doesn't cost ANYTHING to use a realtor unless you sell a property, at which point they charge a % of the total sale price.  If you would be using a realtor to make this purchase I'm sure they would be more than happy to pull comps for you for free.  They would, in turn, get paid by the seller once the sale goes through.  Get a referral for a realtor from someone you know.  And if you can find a realtor that specializes in investment property, even better, as they should have a keen eye for defects or potential issues.

Best wishes!

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