I am looking to purchase a property in Whitehall for $40,000... in the decent area... but I am having trouble finding comps to come up with my ARV to see if it would be a good deal to wholesale... or maybe fix and flip. Values seem to be all over the place in that area.
I came up with $70,000.
It is a 3 bed, 1 bath with partially finished basement, newer windows, larger lot, detached garage, newer siding and roof, 1100 sq feet, built in 1953.
Currently rented for $795.
Anyone have any experience in that area that can tell me if I am way off or in the ballpark?
Thanks in advance!
In the Whitehall area, I dont expect much you can do to improve a house to draw more monthly rent than that. There are just a few select pockets that may be in Bexley Schools that you are going to get higher rents. It a great buy and hold area, so long as you don't have to put much $ into it. I don't expect you to find many end Buyers to wholesale unless you have to put little $ into it and put a tenant in place so it's turnkey. It sounds like it had some updates. If you can just flip it/wholesale it as is, and a Buyer can market it right away then you have a good deal on your hands. Comps vary by street and appraisers are very careful in this area and very conservative and low ball appraisals all the time. Overall Whitehall is land locked, and somewhat stagnant. Crime is higher in the general area than many others. What I suggest, buy at your price, put in paint, fresh carpet and affordable laminate or vinyl, and spruce up landscaping. This is a perfect price point and area for lease purchases. Find a candidate, get $2000-2500 upfront, get them in credit repair, you'll get higher rent (slightly), and if they can't perform in their 12-18 mo period that you agree upon, you have the right to renew or terminate the lease. If they dont perform they forfeit the deposit. If you or they terminate you start again and collect a new hefty deposit and the cash cow starts again. I've helped clients make fortunes with this model! Good luck!
Just looking at Zillow's report of sales in the area in the last 12 months for houses roughly the same size, $70,000 seems reasonable as an ARV. Numbers are all over the place because of the number of houses that have sold in the area that are not repaired and that cannot therefore be included in your comparable sales. Of course, a Realtor could come up with true comps for you that would be far more accurate. But let's play with your $70,000 ARV for a moment.
If you're looking to fix and flip, what do you estimate the repairs to be? If we use a very basic $20/sqft number to roughly calculate repairs (a back of the napkin place to start if you're rehabbing for retail), you would get a repair cost estimate of $22,000. Which means if it's worth $70,000 after repairs, you shouldn't pay any more than $27,000 for it if we use the 70% rule. If you're going to wholesale, you need to pay even less to account for your profit and still have a deal for your buyer.
Now I will admit that's a lot of rough numbers. The $20/sqft estimate and the 70% rule are only lenses through which to quickly look at a property to determine whether you should spend some time analyzing it more closely. If you think it's still worth looking at, go plug your numbers (real numbers, not guesses) into the BP Flipping Calculator and see what it says.
Corey Liepelt, Capital Property Renovation | [email protected] | 614‑526‑4131
@Erica Gerhart I work for a wholesaler who does deals all around Columbus. If he gets a property that is discounted can he come to you with the deal?
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