Perfect property location and price but no financing options
Hi Bigger pockets community,
I am new to the bigger pockets and real estate investing in general. I am trying to learn as much as I can to feel comfortable with purchasing my first property.
However, last night I found this property listed on realtor.com. The property is not to appealing but it has a lot of potential especially since it is in an up and coming area of Boston, MA and is about an 10-15min drive from the Metropolitan area here.
Some details about the property: It is listed at 250,000 and is a Single-family home with 6bd, 1 bath and 2,316 sq/ft. The home is currently boarded up and the seller is looking for a short sale. Also, area median listing price is ranges from 379-599,000.
With being a newbie in this business I am unsure how to calculate if this is a deal, how much renovation expenses would be, cash flow, and financing options.
Let me know what you all think, thanks!!
Use the 70% rule on here... but I'll warn you, it's probably not a deal. If it truly was a really good deal it'd never hit MLS... doesn't mean those deals don't exist but they take some digging. You're also going to need to learn how to est rehab costs.
If the house is boarded up, getting financing could be difficult or impossible. You’d need cash or hard money. Also, you really need to narrow down your ARV to a much tighter range.
My concern would be that's a lot of house to fix with plenty of opportunity for hidden costs. Also you didn't say if this was a flip or buy and hold play. If it's a flip, what's the median home cost in the area. The price my price out many buyers. Also how many buyers want 6 bedrooms and 1 bath. The same would be true for renters. Also 6 bedrooms will invite larger occupancy that will create more wear and tear on the house.
My advice would be to go smaller. Think what the majority would want, need, and can afford unless you want to be a niche investor in which case you need to really understand your market.
- Rental Property Investor
- Baltimore County Maryland and Tampa Florida
- 2,481
- Votes |
- 2,733
- Posts
I don't think that house is the best deal. And 1 bathroom, but 6 bedrooms? The property is probably in need of a ton of work to make it worth the current numbers.
Thanks for all the insight! I definitely agree the house looks like a major fixer upper. I am thinking I would probably have to finance it with a hard money lender. Also, I was thinking of renovating it and keeping it as a buy and hold. However, I need to do the calculations to see if it would cash flow. Thanks for all the great feedback!
@Niara Ijezie If you will message me with the address, I'll run sight-unseen comps to give you and idea of ARV.
Originally posted by @Charlie MacPherson:
@Niara Ijezie If you will message me with the address, I'll run sight-unseen comps to give you and idea of ARV.
Hi Charlie,
I am responding back rather late however I believe the property was listed online although it was no longer on the MLS.