I'm not sure this is the best forum to place this is in but it seemed logical. , so mods please move it if appropriate.
I just looked at a 2 building 6 plex in the Houston, TX area. In general renovations do not scare me, because I know that's where you gain a ton of value, but this is a whooper. It would need to be completely gutted both in and out, all new exterior, probably foundation work, hopefully the bones are good, but there was termite damage that I saw, so who knows. As well to add on to that, it is about an hour away, so that does add another challenge. How do you decide as well whats worth remodeling vs bulldozing? This would be my first deal, the upside is pretty nice, but is it worth it?
Sounds like a very big bite to chew and if Ben is saying no there must be good reason. There are a lot of deals out there and if the upside is just "pretty nice" I would have to agree with Ben. For you to go through basically a demolition to a full rebuild will tie up your money, be very time consuming, and very risky for a first deal. If the risk is extremely high than the payoff better be extremely high.
As newbies I think its fair to say we don't even know how bad a deal could really get so we have to be diligent in taking risks we can manage and work through effectively. Sometimes the best deals are the ones you never take.
Are you doing these rehabs yourself? Do you have the expertise needed? Do you have the time?
If the answer is no, then do you have someone on the ground that you can trust to run things?
Has a termite inspection been done? Have you gotten multiple bids on repairing the termite damage? Has the foundation been inspected? Have you gotten multiple bids on the repairs?
From your description, this sounds like a crap property. There is a lot of money to be gained by finding the diamonds in the crap...and a whole ton to be lost by trying to work with crap. You need to be extra, double sure that you are getting a diamond in the rough, and not a turd.
I would reach out to flipper in that area and see if they would be interested in buying the contract from you if Texas allows that or doing a joint venture with you. That way you learn a lot and they get a property to rehab at a decent price
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