I was shown a house the other day in a nice neighborhood of a nice town. A colonial built in the 40’s the owners died and the children (grown) are trying to sell. The house has been on the market for 167+ days. The house did not show well and was being sold as is. Needs a roof and a new furnace. Otherwise, it needs wallpaper torn down, repainting, refinish the hardwood floors, a granite counter in the very small kitchen and some landscaping. Those are the curable drawbacks that have kept the property on the market so long.
Now the real down side. House is on a corner, and the one street is a very busy road. Secondary bedrooms are very small. 9x12? And there is only one bathroom on the 2nd floor - no dedicated master bath.
The realtor thinks the owners are anxious enough to accept $25K less than its current list price which the amount I believe would cover the repairs mentioned. Sold comparables would indicate $75K to $100K profit after repairs.
Does this sound like a wholesale opportunity to anyone? Should I put it under contract?
Maybe I missed it, but I didnt see where you stated the asking price.
If the house is overpriced 40k, then buying it for 25k under asking price would not be a good move.
What is the actual ARV? What is the asking price? What were you thinking of offering? Any repair estimates?
Unless they accept an offer WAY below their asking price or drop the asking price A LOT… I don’t see you wholesaling a house that has been on the mls for 167 days. I could be wrong though.
Since you can profit between $75-100K after repairs then it appears to be a good deal. I would however keep in mind that being on a busy street will definitely be a hinderance to selling the home fast. You may want to offer $30-35K instead to cover the loss possibility you may take because of the location. An investor will want the same adjustments made if he was to purchase it himself. Does this make sense?
The current asking is $399,999 (this is cheap in my neighborhood!)
The days on market are 175. The realtor claims the sellers would readily go to $375K. They are anxious to sell. In a good market, according to the comps provided by the realtor, after repairs, easily the price could be $499. - that’s not the over aggressive $525 or more.
There is a national guru who says never buy a house with only one bathroom or on a corner. - We’ve got both! I am thinking a row of pine or spruce trees to act as a buffer from the busy road. But we still have tiny rooms - very little in the way of kitchen cabinets and not much of a killer master bedroom suite since there is only one bathroom on the bedroom level and 3 bedrooms to share it! Oh, and there is a park across the street from the house. (you have to cross the busy street to get there) So, inasmuch as parents will say “Don’t go to the park without mom or dad with you.” We all know kids have a mind of their own!
I’m a noob, but it seems that most investor want to pay 70% at the most. If the house really is worth 500k, that would mean they might pay 350k(including repairs). Doesn’t look like something I would try to wholesale.
I say keep looking, and I’d say look elsewhere than the mls and your realtor.
You are right IowaRE…this is not a good deal. You would need to pick this house up for 65% - repairs. You should do your own due dilligence if you do not know this Realtor, and see for yourself what the comps are quickly selling for, because I think that 499k is just an estimate. Found out and repost…