I have the opportunity to submit a price on a short sale that is ABOUT to be listed in the really great neighborhood on Chicago's South side. When it is listed I want to be ready. It's a 2/1 approx. 1,200 sq. ft. with a partially finished basement and 2-car garage. The resale values are great and there are less than six (6) homes for sale in the neighborhood.
The bank is looking for $100k for the property and it does need updating (e.g. kitchen, bathroom, basement needs to be taken down to the studs and bath/bedroom should be added in my opinion) With that said I'm thinking an addition $70k would be needed to cover reno and closing costs.
Comps for the area are $150k for a 974 sq ft property, $226k for 1,700 sq. ft. property and $252k for 1,665 sq. ft. property. After mapping out all the addresses the property I'm interested in sits in the of the neighborhood and in no way is on the periphery.
All the people I've been meeting at REIA and Meet Up meetings and I thought had money to invest don't.
1. How do I shop this and I don't know where to go to shop it since I've tapped into the network of buyers I thought I was building??
2. I guess another question would be is if this is even worth pursuing???
It doesn't look like the property will support the price and/or the amount of work you anticipate. Even if you use a 80% ARV - repair basis working backwards for 100K and 70 K in repairs you would need an ARV of nearly 200K. It sounds like with only 2 bedrooms the 150K house is a better comp.
If your ARV is 170K you can do between 20K and 35K of work depending on whether you use 70% or 80% ratios.
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