Could you help me out PLEASE!!! I found a property that I’m interested in , but being a rookie , I don’t know if it’s worth persuing. It’s a 3/1 on a corner lot with a 2 car garage in a small town in Iowa. It was recently appraised at $28,900 & needs about $10,000 in rehab. The bank took it back & the previous owner owes $ 12,000 in back payments. The bank recently declined a $24,900 offer. I would like any advice anyone could give me. Thank you very much.
You left out several details to help us properly evaluate your situation. This house is a foreclosure so it doesn’t necessarily matter to you what the previous owner owed for back payments. The bank is now just trying to get what it can for this property. How recently was the 24.9 offer rejected? Banks generally don’t like holding properties for long and will tend to walk down the price over time. If it’s been awhile, they might be willing to take that amount now.
What is your exit strategy? Do you want to hold this as a rental or are you looking to rehab/resell? Is that 10k rehab estimate for other people doing the work or are you doing some of it? Can you cut that amount down significantly if you do a lot of the work? If you want this for a rental, what will this house rent for in your town? Do a search for “the 50% rule” to get some tips for evaluating the deal.
Before you can determine if it is a good investment you need to answer what kind of investor you are… If its a flip the deal doesnt seem to be worthy. If buy and hold need more info. Also shoot for 70% of value on a deal…
Thank you for your response. The $ 24,900 offer was made almost a year ago. The $ 10,000 in rehab could probably be cut in half because I could do most of the work myself. I’m also planning on using the property as a rental. Based on other rentals in the area I could get around $ 400 - 500 for rent.
Thank you again for your response.
Even if you got it for 24.9 and put in 5k, you’re almost at 30k. That’s too much IMO for a house that will only bring in $400-500/mo. If the bank has held this property for a year, they may be willing to take less than that now.
Not a very good deal. The rent is too low.
Look up 50% rule on this site.
Much better deals are out there! I look at about 5 different deals a week, but very few make sense.
GLTY!