There is a house near me listed for 55k. I have not gone to look at it yet, but the listing says it needs extensive repairs and updating. The only thing I know about it is the same owner has owned it for many years and the plants are all over grown in the yard. I will be driving by real soon to check out the front and back of the house for myself. The house to the left is valued at around 180k and the house to the right at 130k. The average value of houses in the neighborhood is around 140k. The location is pretty good with a private school only a few blocks away and is on a quiet residential street.
Rent in the area is around 1100-1200 for a 3 bedroom like this house. 1000 sf house
This house was built in 1880. I would have to check into whether it's considered historical or not. I know a few houses have some exceptions where the outside can't be altered to keep the houses character.
The 3 biggest hurdles I see with this house is water leaks, plumbing needing updating and electrical needing updating.
Some quotes I have received for rewiring a whole house is 4k-8k and for plumbing starts at 4k. Considering the age it's likely everything is galvanized which is a real pain.
Back in the 50's- 70's this area used to flood every year so there is concern of possible rotten wood or leaks in the crawl space and asbestos.
Reno budget would probably be around 40k to gut the kitchen, bathroom, redo the flooring, electrical, plumbing, etc.
It's really tough to find anything that cash flows in my area. Nor has anything even come close to the 2% rule.
Most everything in my area is a fixer upper that can easily build value by updating, however with rental rates I would be taking a loss each and every month unless I flipped it.
The market is red hot right now which is driving up the prices on homes. Not to mention there are at least 4 other investors that I know of flipping houses in the area. I have seen there work and it's quality workmanship with materials too.
Is anyone else noticing that it's more of flippers paradise than a buy and hold market in your area?
That looks like a solid deal all around. Use $130K as the ARV and bump up your rehab cost to $50K which gives you some great upside potential. If you buy at $55K you would be all in for $105. You should have no problem cash flowing with those numbers @Brent Paul .
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