house is in a nice neighborhood. house needs alot of work(mostly cosmetic - i think). probably the worst one in the neighborhood. everything is original, 30 yrs old.
the owners are out of the country and want out. as far as i know it is owned free and clear.
how should i go about evaluating this property being a noobie. should i get a home inspector? or should i just get a contractor? i’m pretty handy and can probably do most of the work, but with kids and a fulltime job I don’t forsee myself doing the repair work.
i believe this is a really good opportunity for me. she is willing to do seller financing, but haven’t got to that point yet.
need to know if this property will be profitable for me.
It’s hard to determine if it will be profitable without any actual number regarding the property. As far as rehab costs, You should pay to have a home inspector go through the home. An inspector will have no incentive to tell you anything but the truth (in my experience). The good ones spend the time to educate you on what to look for in the future. Then you can have your contractor look at it, and you can come up with a game plan of what needs to be fixed and how much it will cost. An owner financing deal sounds attractive if the price is right. But if everything is 30yrs. old, you may have more rehab costs than you think. If you’re handy, making the time to do some of the work (like demolition) may save you some cash. But you have to a good idea of the rehab cost before you can tell if it’s a good deal or not. You’ll also need to know what it will sell for ARV. Good luck. :banana :elephant
Get the comps (last 3-6 months, w/in a mile, similar design and sq ft) and figure out what the value is. Once you know that, then you can use this formula as a rule of thumb:
ARV x .7 - repair costs = max offer.
ARV is after repair value, and as far as repair costs go that includes everything: rehab costs, holding costs, marketing/realtor costs etc…
Most investors are trying to buy for cheaper in this market, but at that price you should be able to be all in for cheap enough to sell at a discount and still make a good profit.