Hey guys! Me and the wife found what we think is pretty good deal in a great neighborhood. The comps in the hood are in the low 200s and the owner wants 20k for the property. It has significant roof damage and fire damage and the back yard is a mess with a pool in need of major repairs. I am wondering if its worth getting a general contractor over there for an estimate or if we should chance it, and make it a wholesale opportunity since we haven't really flipped on this level before. Another issue, if we did hire a GC, would be if the house has so much damage that it needs to be torn down, is should we rebuild it the way it was a 1970s) design or open it all up in modern fashion. Our hearts tell us to flip it no matter the cost but our minds are saying find an investor who is willing to flip it and we just wholesale it. I also think we might be able to get it closer to 15k given the time frame and damage. Thanks!
You should never 'chance it' when it comes to major repairs like this if you aren't super experienced or have enough money to cover major unexpected expenses. I'd get the GC in their ASAP and get some bids so you know what you're working with in terms of budget and time. Always better to be safe than sorry and everything that glitters isn't gold.
@Luke Mitchell we just bought a house with this exact profile. We knew how much we'd have to spend to get it up to the comps in the neighborhood, and the deal made sense. Here is the link to the blog I am writing on this deal:
I say yes, get AT LEAST one GC to take a look and give you an estimate. After running numbers, if it looks good, it could be a great deal. If the numbers don't add up, pass.
All the best!
@Luke Mitchell , If the numbers look strong from the outside, I would definitely get a good GC to take a look at it with you. Worst case, it is too far gone and you pass, but having an opportunity to look at it and get a feel for the issues and numbers can be invaluable for your own knowledge base and future deal evaluation. I will almost never pass up an opportunity to look at a deal that has good numbers from the outside, regardless of issues.
Investing is a risky business and as such you have to take CALCULATED risks to be successful. I would not let a burned out property scare me off if I have a good understanding of what it will take to revive it, the costs and am comfortable the numbers and my, or my contractors ability, to pull it off.
Best of luck.
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