Advice on deal
BP friends
I've found a house that is for sale by owner, a guy and his two brothers inherited it and have failed to pay taxes on it to the tune of 12k dollars. He wants to sell it and is asking 40k. I believe I can get it bought for 30, but he has two other people looking at it at this time. The house is trashed and contractors I've had over there estimate 25-30k in repairs (new roof, new AC in and out) to make it a bare bones rent house, nothing fancy. My realtor has comps in the area and has recently sold houses in the area from $60 sq ft to $85 a square foot (this one is 1300 sq ft built 1972). She says a quick sell price would be 75K on the house if basic repairs are done. Based on two other houses I have rented for 1000 ea, I know this would be a 1000/mo rental minimum. So I'm looking for advice....Not enough margin for a flip, but a decent rental I believe. What am I missing?
My local bank will lend 60k on it (5.25% 15 year amoritization on a 5 year balloon) once they get a list of repairs from the contractor, and if it appraises with their in-house appraiser for 75k or better after completion, I have to come out of pocket with nothing. Unless something major comes up in the rehab, I think this is potentially a good deal. thoughts?