I’ve been checking out an REO house in a local town about 20 miles from where I live. I went and looked at it and it’s an older house, 1956, not exactly pretty on the outside, but from what I could see, there was no external or internal problems with the property. It’s 1276 square feet, 3 bed, 1 bath, carport. It was appraised at $87500 five months ago. I talked to the REO manager and I think they might sell at around 60k.
Similar homes in the area around this house have sold from $84000 to $124000 over the last 6 months. With this info, do you all think that $55000 would be a decent price to offer for this house? I’d require an inspection, but I imagine that it wouldn’t take anymore than $1000 to fix any visible problems it might have and to get it up to par in curb appeal.
I don’t think I’d try to sell it for $87500 because I’d want to sell it fairly quickly if possible. I don’t know as of yet what the price I’d be looking for would be. If I can’t sell it in a reasonably short amount of time I’ll still have to sit on it while paying a mortgage payment, utilities, and doing lawn maintenance myself. I might try to sell it around $75000 because there are no 3 bedroom houses in that town that are marked lower than $79k on the MLS.
I read posts like this on here, where a home is selling for around the same details. Where are these markets? Where I live in NJ, a similar 3 bedroom, 2.5 bath, 1300 sq ft home with 2 car garage on a little less than a half acre would be $600,000 or more, and not worth the $20k. Your deal sounds great if it can be done. Sounds just like those TV shows.
If that is all you need to put into it, then yes you could make it work. Have you planned for any gotchas? With only 1K of rehab will it be similar in quality to those fetching 80K? If the answer is yes, go for it. Make sure your numbers are ACCURATE.
Lots of places outside of NY/NJ, FL, NV, AZ, CA, WA, DC/VA/MD… Take a look in the south and midwest where land is not at a premium (ie, less population density). In NJ, you aren’t paying for the house, you’re paying for the lot.
I’m in Houston, and I’m looking at 3/2/2 for 65k with ARV of $110k and rents of $1k all day… the real problem is finding buyers who can qualify now, meaning the $110k could come down…
That leads me to a couple more questions… since you brought up Baltimore.
I looked at a few places there. Scary. The houses I looked at were the only ones on the block that weren’t boarded up. But boy were they cheap! Some of them had tenants already and they more than passed the 50% rule, but I just don’t feel comfortable investing in a place in an area like that.