Rental Property Investor · Newark, DE · Member since 2020 · 41 posts · 6 votes
A friend contacted me about a house and told me the
Purchase price : 142k
ARV: 250k because he feel it would sell for that much based off a house selling for 245k in the same neighborhood
Needs about 50k in rehab
My friend said he needs to have the place sold ASAP. I looked on Zillow and none of the houses on that street are even touching 200k. But my friend had flipped plenty of houses and says I can definitely make 20-30k profit.
I just know that the purchase price and rehab do not amount to 70% ARV. I have not done a RE deal before accept when I initially bought my house. This would be my first deal and I have been struggling to find deals. Should I pass ??
Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
5y
Not enough info. Not enough final numbers. Don't make decisions like this when you use the phrases, "...needs about $50k in rehab", or..."...my friend says (even if that friend has done this before)...".
If you looked on Zillow and none of the houses on the same street were over $200k, compare the size of those houses to the subject house. What are the sq ftgs?
If your friend said houses in that neighborhood sold for $245k, where exactly was that neighborhood...how close, and what size was that house? Just one house doesn't make an analysis...even if that house was next door.