So this house has been on the market for 80+ days and I am about to make an offer on it but for the life of me can not get an ARV. The house sits next to 3 other houses that are in the same shape or worse off. None of the 3 homes have sold in the last 8+ years. Now, these three houses are surrounded by homes that start out in the low 500's. They want 165 for the house and I am hoping to get my offer accepted at 145-150. These are the last of the original houses that are over here and they are continuing to develop the area, but I can't find a comp. Opinions on how I get the ARV and whether I should do a serious high-end rehab (getting rid of an office moving the bathroom to where the office was so I can expand the very cramped kitchen/ dining room so they can be two separate spaces and then finishing the two rooms upstairs which are currently wood paneling.) Or just putting basic updates in replacing carpet and going with the three lower-end homes next to it. What would you do in the situation? This is in Virginia Beach and there are no other homes this size and age in the area.
I don't know anything about the market in Virginia, but if I was looking at something with few reliable comps, I would: 1) expand the geographic area or similarity metric you're looking for comps in to be a bit wider. Something similar enough looking will have sold somewhere in Virginia Beach. 2) Develop a feel for more general valuation metrics like the price/sqft, GRM, etc., 3) Ask a local broker for a price opinion, 4) Just make the offer contingent on appraisal.
@Aaron H. thank you for you answer the tricky part about Virginia Beach is one home could be worth $1m in one neighborhood and then 250k in another this part of the city is just now up and coming and I just wanna make sure I do my renovations in standard with the arv I don’t want to dump 80k in a Reno that’s not going to pay off but I also don’t want to miss out on a big opportunity. The house has been appraised at exactly asking price and I’m gonna offer 150k And I don’t want to pay more but I might be able to raise my offer depending on how much I can get out of the house
Be REALLY careful with this one. It is on a major road, and you cannot compare it to houses that sit within a normal neighborhood. The city only assesses the lot at $65,000 and the house for $47,900. In my opinion the only reason I would ever buy this lot is if I though there was some chance the city may one day purchase it to widen the road. The house is only 940 square feet. It also appears that the back corner of the lot is in a 500 year floodplain. That’s a low risk, but with the flooding the city has had in that neck of the woods, you need to take that into consideration. No chance I would consider this for a flip.
@Patti Robertson I really really appreciate your input and I think you might have saved me from my first fail aha. I'm going to take your advice since this is my first deal and don't know very much about that area of VA Beach. I was going to try and brrrr the house not flip it but the same concepts apply for the most part. The bank won't give me the refi money if they don't think its worth it I was just having a really hard time trying to figure out if it was worth it or not. So thank you so much!
It would be OK for a rental, but you’d probably only get $1300 or so for a 3/1/5 on a busy road so far from anything. No point making it a 4 bed because it is still only 940 SF and doesn’t have two baths. Def not worth a $150K purchase price. We have way better options in our market.
If you could be all in under @100K it would be worth taking the chance on to rent and pray the city sometime buys it to widen the road.
@Amy H. Princess Anne
@Patti Robertson I actually went and looked at it before I made this post there was an addition made to the home. I have been trying to figure out why it wasn’t included in the sq ft. So what your saying is that the house is worthless but the land could possibly worth something one day. What about if I purchase the home under 120 and then held it until I could get the house next to it and then there is enough land to build one of the size houses that are neighboring that start in the low 400’s. Do you think that would make it more worth it? Also were you at the last TRIG meeting? I think we briefly meet.
I was out of town for the last TRIG meeting. I am the person who sent videos in so I could share my mistakes. No, that strategy won’t work. Nobody wants half $1 million house on a busy road. At 120 or Less it would make it in OK rental if you didn’t have to put too much into it. But only if you don’t have to buy flood insurance. Or are in adding risk of flooding. I would suggest calling the city and getting the long term plan so you can see if there’s any chance of them one day buying up that land like they did at Witchduck. Even from Google maps you can see how busy that road is. I’m now with them expanding the city buildings I would imagine that they would probably want to upgrade the route to the municipal Center. But I’ve not been paying attention to the city plans. It’s something you should check If you’re serious about that particular property. Even if you’re not going through that exercise would be a good training experience for you.