property selling for 55,000 needs 30,000 in repairs

4 Replies

property needs cosmetic work only so it seems, tax assesed value is 147,000 and zillow had it appraised at 200,000, nice non crime neighborhood.  can u advise

thanks keith

@Keith Motola  Welcome to BP!

As it stands the tax appraisal means nothing and so does the Zillow estimate. You need to run property comps in that area and get your ARV. Best idea would be to contact a RE agent and ask if he can run the comps for you(it's always good to have an agent on your side) if you can't find real data to calculate the ARV yourself.

Best of luck.

I hope the repair numbers are coming from you/your contractor, otherwise I wouldn't trust that $30k is just cosmetic fixes.

Echoing Florian, you need to run the numbers to see what comps have sold for recently.  Zillow might be giving you a good estimate, but if you were just buying a house to live in which would you rather have: "Zillow says it is worth about $200k." OR "Having looked at the market, there are 5 comps that have sold in the last 2 months for between $185k and $220k that are close to us in size and configuration, so given the differences I feel a value of about $200k is fair."  Which is more persuasive, more likely to be accurate?

@Keith Motola hit it right on the nose. Those values can be way off. You need to get real comparables to analysis this deal. That asking price, rehab cost, and ARV is an investors dream. Do some more concrete homework. Good luck.