Potential First Deal Advice

[Jim Tedder]

Found a FSBO property I'd like to get some feedback on for a potential deal. The house is in very poor condition. 3bed/1bath with full unfinished basement and a pull under garage. Has been vacant for at least 7 years, and will need a complete rehab in every area (elec, plumb, HVAC, floors, roof, kit, bath, etc...All) Tax value is 100K. Large lot with a fenced in portion at the back currently begin leased to a commercial veterinarian for $1200/yr, which pays property tax amount. This arrangement could remain with the sale. Comps are selling from $85K to $97K. The owner owes $38K to a private lender with no interest and is looking to get at least $10-$15K in cash up front to settle some judgments. This is potentially my first deal so any feedback would be greatly appreciated. Thanks.

[Wendell De Guzman]

Jim, if it needs EVERYTHING, the rehab cost alone may not make this worth while. Say it needs $50K in repairs. It's worth $85K and it needs $38K to pay off the loan and seller is asking for $15K cash.

Let's do simple math:

Loan - $38K

Cash to seller - $15K

Repairs - $50K

Total: $103K

Your re-sale price: $85K

Your profit (if you sell it at zero cost): - $18K (NEGATIVE 18 GRAND)

If I get the numbers right, this is a BAD DEAL. Move on.