The house is 3800sqft plus 1350 sqft unfinished basement REO 4/4 built in 2002. Secluded location in woods on River. Subdv. has about 10 other houses similer size, and locations. The whole subdv. is rural by nature, but is still w/ in 5 minutes of its district elementary and high school and 15 minutes from closest mall. 10 min. from interstate.
Bank is asking 279k. The tax accessed value. is 344k. I have 2 comps in subd. in last 12 months that sold for 450k and 480k but they where both about 5000k sqft. each.
The inside is immaculate not needing anywork. The outide needs about 20k in work. The back deck which is split level wasnt finished and the support beams are still temporary 4x4 posts. what would be a patio area isnt finished and much of the trim around doors and windows outside wasnt painted. the front porch is in same shape. the drive way isnt paved and is basically washed out and the yard is basically grown up weeds. My best guess is that w/ about 30k you could pave, landscape and finish trip outside, and finish basement to add to sq/ft of home and then sell for 450k minimum. profit of 100k+/- 10k. When you ride by home its all grown up and the hand rails on deck are even falling off. It scares potential buyers off b/c it was never finished. tHe original owners ran out of money. From what I understand they hardly even lived in the place. Profit potential looks too good to be true. I just dont see why someone else hasnt seen and jumped on this deal. I want to do it, but its such a large transaction Im kinda scared of it.
Should a first timer take on something like this?
How long does it take to sell big homes in that area? What is the average sale price in that area? If the average is 200K and your home is 450K, you will have a lot less buyers if any. Also look at taxes and holding costs, that can eat away at your cool 100K easily. I wouldn’t finish the basement, that is just wasting money. Expecially on a 3800 sqft plus home. Also since the place in unfinished, what is it’s current status with the township? You may need to even refile permits and bring it upto current code (possible). You may have to get everything re-inspected, permits for the work to be done, and file for a C.O (certificat of Occupancy), in some areas the C.O can take months on it’s own. Also you need to know utility status, are the wells and septic installed? Permits? Inspected and passed?
yea the house was built in 2002. It was occupied for just over a year. it’s an reo listed w/ a realtor right now. the asking is 280k w/ an accessed value of 380k and 2 comps in same subdivision same size and design that sold in under 60 days for 450k and 480k. All the homes in that subdivision are 300k and up on value. I guess my biggest concern is I can buy the home 100%ltv (I’m a mtg. broker) so thats no problem. and then I can refi. w/ several diff. lenders using appraised value b/c they dont have title seasoning requirements…and get cash out to do the rahab. and I have a “mtg. friendly appraiser” that wont mention the deffered maintenance when doing the appraisal…so thats covered too. I guess TTL piti on initial purchase will be about 2400./month. Carrying costs is what scares me…2 house payments can be tough to make.