Hi guys. Whaddya think?
Zillow Estimate: 132K
Repairs: 10K
Purchase 85K - straight option contract
Particulars: 3/1, 1000 sqft, Currently rented $900/mo - mo to mo lease, decent neighborhood, good schools. Can’t find anything that has sold for under 125K in 6 months on zillow. My seller wants all cash, all fast.
I wouldn’t trust Zillow there are other valuation sites like cyberhomes and realquest. Check your comps real good.
On the surface, a lousy deal even if taxes and insurance are low. Seller doesn’t want to sell bad enough.
Assuming your numbers are accurate (big assumption, especially with Zillow)
Then:
ARV $132K
Purchase $85
Repairs $10K
Buy/Sell/Holding Costs $10k
TOTAL EXPENSE $105k
leaving a $27k profit, which is about the max a rehabber would pay. If you are doing the rehab, then it would be a borderline deal, assuming the numbers are solid. This is too high for a wholesale deal.
Thanks for the review everybody.
Zillow was only semi reliable 3 years ago when things were normal…Now I wouldn’t use zillow to price anything…
Prices are going backwards in many markets so zillow will be way off quite often.
to give you an example of backward pricing here are some prices on homes we have picked up in the past few weeks
Sale in 2004 96,000
Sale in 2009 22,000
Sale in 2006 105,000
Sale in 2009 13,500
Sale in 2004 $85,000
Sale in 2009 $22,000
Not all markets have gone to $hit as badly as you might guess zillow was WAAAAAY out of wack on pricing these.
Good luck