ARV - Forced appreciation? Jacksonville, FL
Hello All,
I'm new to BP, I bought all of the BP books and it is widely recommended there that if you are unsure about a deal to ask the experts here. :)
Deal details:
3/1 house on 5 acres of land,
Jacksonville, FL 32207 (should share complete address?)
First off, not sure if I have a deal, but if I deal could be made the 2 old ladies who are the owners would only make it with me because I have taken my time over the last 4 months to get to know them, met their families, went to visit them at an old people's home, etc. They told me investors have been calling, mailing, etc. but they would never make a deal with them because they seem very greedy.
Their parents bought this 5 acre farm in 1942, they grew up on the land, had cows, pigs, chickens, goats, gardens, etc. So a lot of great memories.
This property is now abandoned, the 3/1 home needs full rehab and has foundation issues, needs new roof, they also mentioned it might have to be rewired.
Out of the 5 acres 2.7 is SWAMP but the other 2.3 is dry. However only about 1 acre is clear, where the house is and the front yard which is beautiful green grass.
The neighborhood around this property is a mixture of beautiful houses and trailer homes, mostly made up of working class folks who have lived in the area for generations. Everybody knows everybody.
The neighborhood behind the 5 acres, is mostly low income folks, but houses on the MLS are selling at the same dollar/SQFT rate as the working class neighborhood. When you drive through it you can tell it's a lower class area.
However, within less than a mile sits one of the most desirable neighborhoods in Jacksonville, San Marco.
1. I have the house under contract for 60k
2. A fixer upper right next door sold last month for 87k but it's only a 2/1 and sits on less than a 1/4 acre with 768sqft.
3. here are the rest of the comps in the area including both neighborhoods described. MLS comps.
3/2 - $110,000 / 1,480 = 74.32
2/1 - $87,000 / 768 = 113.28
2/1.5 - $120,000 / 1,139 = 105.35
3/1 - $113,000 / 1,314 = 85.99
average sqft price. >>>> $94.73
4. My ARV estimate is based on adding a master bedroom and bathroom by making it a 2-story home.
I hope it looks like this.
est. sqft. 1400.
1400(sqft.) x $113.28(closest sale) = $158,592
Lastly,
I am a marketer by trade, for the last 15 years so I am confident in my ability to market the property once complete.
Got a contractor whom I've used on a couple of flips where my estimates have been accurate in low income neighborhoods.
I've been dabbling in real estate for about 11 months and so far I have done 17 deals.
Please let me know your feedback but please be super honest, I am here to learn from you guys, the experts. :)
Ben
P.S.
I've also thought about getting it subdivided and setting mobile homes, we could probably set at least 10, thoughts?