Is this a Rehab?

Rehabbing, Fix and Flip, Rental Properties
1

I don’t know too much on rehabbing aside from the fact that you buy a broken home, fix it, and sell it.

I found this home in Texas. It is 2231 sq ft on a 6600 sq ft lot. 3-4bd it says. 2 bath.

Realtor says this: “Foreclosure,needs a lot of work is an gross understatement Nice neighborhood conveniently located.”

It is listed at 39,900. I saw some pics and it needs some work.

I found a home a couple streets over for sale. It is 600 less sq ft, 3 bed, 2 car garage, and a lot that is 3000 sq ft bigger. It is listed at 100k.

I then found a home 3 streets to the NE that looked identical in model. This home was 1000 sq ft less and listed at $80k

Anyway, just curious on thoughts. Would this be home you decide to take a closer look?

2

if the margin is $40k to 60K (at very, very best) and they say it needs work is an understatement, then forget it. A new kitchen of reasonable quality and doing the work yourself is $6-10k in materials.

I did a 2500 sq ft house major rehab and spent $35k in materials and did all the work myself. In Southern Calif, it was worth it. When you figure in holding cost and resale, I would say it worth minor rehab at best. Heck, good acrpet will set you back $2k a lone for a house that size.

Its worth a 5min phone call to the listing agent (ask for digitial photos of kitchen and baths(s), but my guess its a basket case not worth your time.

3

Is there some sort of minimum margin to have to even think about a property?

4

If the Realtor ™ is admitting it needs a lot of work, than the place is one of those lite a match and start over deals. I would bid on land value minus cost of removal of the home. What you need is the Realtor to English Translator

Cozy = Small
Must sell = Realtor will be taking a vacation
Great Deal!= Only 20 percent over market value
Needs TLC = the roof just caved in last week.

5

Yea, I saw 7 pictures of the place.

From what I could tell from pics, the place needed:

  1. Couple new doors.
  2. Cabinet work in kitchen and bathroom.
  3. landscaping.
  4. couple windows potentially
  5. new carpet

I am sick of the word “Cozy”. I am quite familiar with Realtor-ease. They don’t fool me :smiley:

6

That stuff isn’t so bad, but if the Realtor listed it as needing a lot of work it usually does. And would included a Roof, Sidding, possible foundation problems, septic (if avail), heating systems, water heater, plumbing, electrical service, structual issues, these are the things that eat profit like a hungry hippo.

7

Have you talked to the agent. Maybe he/she can give more details, like what the seller will be disclosing as issues (not sure how that works in TX, though).
You could always make an appt to see it and bring a home inspector. It’ll cost you about $300 but small taters if its a great deal, right?