Atlanta, GA · Member since 2017 · 37 posts · 3 votes
Hello all!
I sent out mailers and got a serious response. This gentleman had called and said that he is selling his rental homes for 20k and they are about two hours away, so off I go! One of the homes is sincerely vandalized and the other needs work as well. It is a rental community and the areas rents are about 500 for the type that it is. It would appear that the ARV is possibly 30K for each. Does anyone have any advice for a situation like this? Any guidance would be appreciated, thanks!
Investor · Denver, CO · Member since 2016 · 736 posts · 582 votes
9y
Re-evaluate it when it comes up for tax lien sale because the current owner has abandoned it (seems these are the types of homes I'm finding more and more of these days LOL).
Specialist · Grand Rapids, MI · Member since 2016 · 1k+ posts · 611 votes
9y
Keenan Smith Am I missing something here? Are the properties rented? If they are rented and certifiable as is then who cares about ARV when it will come as is with equity. If they don't cashflow and don't have room to make money and you can't negotiate them down then you are basically asking a question that a kid could answer. Keep it simple.
Atlanta, GA · Member since 2017 · 37 posts · 3 votes
9y
I don't think I was being clear. Is there a different strategy to use besides just repairing it? Tearing it down and putting a mobile home or reducing the repair cost by making it habitable without making it over desirable? At that price point I wouldn't expect to use the best materials.
Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
9y
@Keenan Smith as other said as a standard deal it sounds like no deal. Just walk.
Yes there may be other strategies like tear down and rebuild. I doubt that would be viable. The purchase price and the tear down cost will be close to the neighborhood value when done.
It sounds like even if this possibly could be made into a deal, it would be a very mediocre deal. Why take the risk on a property that is two hours away if it is not a home run.
Contractor · Indianapolis, IN · Member since 2016 · 267 posts · 144 votes
9y
Reevaluate the repair costs, re affirm the arv. then bring his price down to next to zilch. Be very honest with him about the condition of the home and what you will have to do to make a profit.
But I still agree with most people here. If it's a close call I wouldn't bother.
Redmond, OR · Member since 2017 · 98 posts · 36 votes
9y
What is the land worth? In my area there are many "cabins" that people build on the lakes where the land is worth much more than the house. It seems like in those cases a developer might have an interest in knocking it down and building new.
Just a thought. I'm sure this only applies in very specific situations