Advice on a Potential Rehab Deal

2 Replies

I have a 4BR, 2BA (1,960 sq. ft.) property that I am currently looking at, and it could possibly garnish some large returns if executed properly.  The property is located in a lower class neighborhood, but it's right next to one of the country's largest chiropractic school.  The students at this school are graduate level students, and are older than your traditional college student, and tend to be more mature.  Some of the students even bring their wives and kids with them when they move here to attend college for an uninterupted three year period.  The house is a completely trashed, everything has to be rehabbed down to the studs, but the asking price is only $5K; and Zillow has it listed at $72K.  My brother is a union electrician, and he's also able to do most major construction work, so we would be able to do most of the labor ourselves.  How should I go about evaluating whether or not this is a good deal?  I still have to research the numbers more closely, but I feel this could be profitable with a quick flip, or even a buy and hold. 

Hi @Freddie Taylor,

Sounds like you might be on to something. Have you been in the house yet?

Five-thousand is a really cheap price that I'd make sure that the house is structurally sound. Make sure to do your due-diligence and get an inspection done.

Have you compared this house with others that are in the neighborhood? Study the value of other homes with similar stats to help determine what the ARV could be. I've realized Zillow (Zestimates) is not the best source for values.

Good luck and hope it works out!

David

@David Karcz

I haven't been in the house yet.  I just found it online this weekend, and I e-mailed the owner my contact information, so that we could set up some time to go through the property.  I planned on having a GC walk through the property to identify what exactly needs to be done to get the house rehabbed, as well as an inspection.  I've quickly looked using Zillow, but that can be inaccurate at times. I didn't check the comps using the county's website, but I will also do that prior to submitting an offer on the property.