Hi guys this is my first time posting on the boards and I am very excited to be a more active member of this community. I have read all the bigger pockets books! My girlfriend and I have been following bigger pockets for the last 6 months, studying, preparing and getting to know our market. We are in TX houses here last a grand total of 3-5 days on the market at an affordable price. We have been pre-approved for an FHA and or conventional loan. We wanted an FHA in case we found a property we could house hack but it looks like we might need to go into a conventional loan. There are two properties we have narrowed it down to, two properties one i Love and once she Loves.
About both properties: Both in close proximity to a downtown, both close to two major universities and supermarkets.
About the first property:
- $159,000 asking (came down from $174,000) back on market, 109 days on zillow
- 1,174 sqft
- 3 rooms 2 full bathrooms
- Electricity read, washer and dryer ready
- Offer we would like to give considering all the repairs: $142,000 (Zestimate is $157K)
- Rent estimate: $1,389 monthly after $15,000 investment
- Needs new floors, the entrance needs to be torn down, needs paint, has some water issues in the addition in the back room, definitely has foundation issues. Kitchen and rest rooms and live in ready.
- $152,000 asking back on market, 40 days on market
- 1,600 sqft
- 2 bedrooms 1 full bathroom
- They did a cheap flip on the house (has new floor and paint), has foundation issues, the high schoo is next to the house so major traffic area, kitchen is not live in ready, no space for the fridge, need to change the wiring for washer and dryer since it's in the kitchen, the front and back door cement steps need to be torn down.
- Electricity is old might need to be updated soon
- Offer we would like to give: $145,000 (Zestimate $132K)
- Rent estimate: $1,250
Any suggestions? We are also considering still shopping around and waiting for a better deal, but maybe we should also low ball them a little bit more since they have been in the market SO long.
Thank you all in advance for your help!
@Rebeca Perfecto At the end of the day this is going to be the house you live in so you're going to want to at least like it. If you don't have much experience in rehabs and renovation then I suggest over budgeting for repairs. The biggest thing that I would caution against is purely basing the financials on what Zillow tells you. If you do that you're going to get burned in one way or another. Zestimates and rental estimates are not there to be your friend and you need to expel those numbers out of your head before it truly biases your thinking. Put some leg work in and try to get a sense of what things are selling and renting for. Over time you'll start to develop a more robust intuition.
Thank you for your feedback! I agree on the Zestimate (my realtor tells me constantly) however the "rent estimate" I added on the information is based on market research, zip code and conversations with neighbors and students. We are hoping it is a rental property and not our residential property.
What especially catches my eye is that your second option has so much square footage and needs so much work, yet you are considering offering such a high number.
As well, I am curious if you have had anyone inspect the foundation issues of either property and what the repair entails/costs.
To add to my prior post, I realize if you haven't put in offers, you haven't 'inspected', but on viewing them did you have a contractor or 'friend' with you who estimates work and such repairs for you?
That can be a huge help to judge repairs and substantiate lower offers on the properties.
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