Risk vs. Reward in BRRRR opportunity
Hey BP! I'm currently under contract on my first investment property and am looking for some pro tips and advice.
Property: distressed 1975 SF in central Oregon, lot is sized to accommodate an ADU. Property needs rehab, most components are original to home. Budgeting $30K to bring it value, will be DIYing most of it, including kitchen, floors, paint, replacing windows, removal of popcorn ceilings.
It's a tough market here, so I'm not necessarily purchasing at a DEAL, but it's fairly priced considering the condition and market. After a $30K rehab, the value will likely be $20-40K above what I'm paying for the property.
Purchase price: $310K, rehab: $30K, ARV: $360-380K
Im looking for feedback on what I've identified as risk in the current situation:
-since it's pre 1978, lead paint and asbestos may be present. Is it wise to get tested, or just act as if it's there and take all precautions? Ive read mixed things on DIYing an older home, as well as having tenants with these potential hazards. After rehab, the property will not look distressed, and will receive fresh paint, ceiling repair (so when your average person looks at the home, they would assume there is no hazard).
Anyone run into issues with renters because of an older home due to these common potential hazards?
My dilemma is I feel there is a lot of opportunity with this particular home and the lot itself as an ADU can be added (as either long term rental or STR) however am concerned with the potential risks (both cost and tenant facing) with it being a pre 78 home.
Any thoughts or advice?