Hello all, super realistic yet super motivated future investor here. I recently found a house for sale not on the market. The home sold 2 years ago for 83,000 and is now being listed for 33,000. The home is a 3 br with 1 bath on a half acre lot. Very nice with no need for repairs of fixing up. It has had hardwood floors installed since the purchase. I know bc my brother is the one who previously owned the home. Rent in the area is not the best with the average at about 750.00 to 800.00 with a home this size. I calculate 150 to 173.00 monthly cash flow. That is very conservative and after all cost including vacancy of 5%. This home is worth every bit of 83000. With the 50k in equity, I think this is an awesome deal but I am also shy on the down payment bc of my low income in law enforcement. Am I right to think this is a great deal on this single family property?
If it is Really worth $83k, why would Any seller/agent list it for $33k. Also, it is Extremely difficult to get a mtg loan for under $50k, get that lined up first.
It was purchased with a V.A. loan and the occupant passed away. It was listed higher but has dropped to 33k. l am unsure of the reason for the drop other than that but I am certain of the homes value and condition. I am currently discussing financing through a small local branch that I have been doing business with for a while. Nothing set in stone at this time.
Just by the numbers it sounds like a great deal! I'm just curious what expenses you calculated for this property because your monthly cash flow should be much higher at this price. If this house were in my area of LA it would cash flow over $300 per/mo giving it close to a 20% CAP rate!! In most places, deals like this that REQUIRE NO RENO, simply do not exist. Again, this is strictly by the numbers you have provided and I'm assuming a 20% DP.
Which brings me to my biggest question...Why would someone sell a house worth $80k for only $33k?? In my experience, its crucial to always find out why someone wants to sell, especially when they appear to be losing money. In most cases, what they tell you is a lie. I would go through this place with a fine toothed comb and check every sq. inch. How old is the roof? Age of HVAC/ furnace? Does the plumbing need replaced? Is the foundation solid? Flood zone? etc etc.. Your due diligence on a property like this one is crucial.
I would proceed with caution, but definitely proceed!!
Good luck and let me know if I can help further.