Beginner deal analysis

[Bryce Fairburn]

Hey BP folks

As I am still very new to this, and have a level of nervousness attached to this deal, I am looking for some thoughts and feedback.  

The property: 2bed 1 bath, 5acre.  Detached 2 car garage.  Age 10 years old, located in Canada.

The market: if ‘turnkey’ valued at 275-300.  The house is currently listed at $165,000.  This is a market where people are moving to from the Toronto area so prices are increasing slowely right now.

The story:  individual cut many corners doing the renovation work on the property, and so it ‘looks really nice’ but has a list of deficiencies.  The current owner privately bought the house and is now trying to sell it after discovering all the deficiencies.  They are working with their title insurance, and my understanding is whatever they sell it for the title insurance will cover the remaining.

deficiencies:  repair work quoted at $50,000.  All deficiencies are things that I have experience doing.  Here is the list:

Engineer proposes the following changes in order to permit correctly (residence). Inspector has reviewed and soon to be an open permit.
1. Install a Dricore R+ Insulated subfloor throughout the first floor of the residence (R value of 3).
2. Repair vinyl siding on the exterior if deficient (ie. “J” channel, drip edge, corner posts and loose vinyl). Window and door framing to be built out and capped as required to ensure a water-tight condition.
3. Complete stairs with new handrail compliant with SB-7.
4. Remove the ceiling and wall finishes from the second floor and repair deficient insulation, vapour barrier and ventilation. Knee walls will either be insulated with 3” of 2 lb, closed cell spray foam insulation or R-24 batt insulation, 6 mil vapour barrier and 1⁄2” drywall.
5. Install a continuous ridge vent on the peak of the roof to promote airflow through the ceiling space and to prevent possible ice damming.
6. The existing skylights will be either removed or have appropriate insulation added.
7. The rear exterior balcony will either be replaced with a new balcony complete with guards compliant with SB-7 or removed entirely

Exit strategy: sell first for 5-10% below market value in order get the capital to move into the next property.  2nd exit is to brrrr it, however rental market there is not as ideal.

My questions:What price would you offer?  With the information I have provided would you purchase?.  Any other advice would be great.

Bryce