I bid on a brick row house $195,000 to fix and live in for a year then sell. This is a gut rehab and I estimated repairs would be around $100,000. Now I find out that there are structural issues with the property. This will of course bring my repairs cost way up about $40M to $50M more so now I'm unsure on whether this is still a good investment or not.
West New York homes can go for a lot but I'm thinking that I should pull out of the deal since now I may not have a profit.
I'm from West New York but very new to investing so don't yet have a handle on how much would be too much in the area.
Looks like youve got a lemon, or maybe a diamond in the rough. It sounds like a huge project for a new investor, but it would give you a lot of experience in rehabbing. Assuming you know the ARV (after repair value) of the house based on comps and your research, work backwards and see if this deal is worth it for you. At the estimated rehab price, would this lease you with equity in the house once its done?
We dealt with a house in Jersey City with issues with the 'bones' and I can say from experience that the bill with structural issues adds up fast.
Are you able to renegotiate the price with seller based on info you have now or is this from sheriff's sale?
PM me if you'd like to discuss further. I can pull up comparables so you have a good ARV to work with. I also have a good attorney's contact who might be able to help you recover a deposit in such a situation. Plus a local contractor reference from Hudson County for a project this size. There is also the option to sell it fwd if this is something you can not take up.
if all expenseses add up to $340k to $350k, i would suggest you move on....But your estimated $100k repairing sounds really high. my advice is to truly understand your after repairing value.