Lease Option investor looking at a potential rehab. Need a little help.

Rehabbing, Fix and Flip, Rental Properties
1

Hi All-

Here’s my dilemma. Hope you guys can help.

I don’t do rehabs. I focus on l/os and sub2 deals. Have never really looked at rehabs because of all of the risk involved (holding costs, contractors, slow market, etc, etc).

I have recently stumbled on a deal that looks pretty tempting though. Here are the numbers and circumstances. Let me know what you think.

House appraises at 126k. It has been involved in a fire and needs to get a new kitchen. The seller is looking to sell for around 40k. So, I figure even if it has around 35k in repairs that are needed I would still be into it for around 60% of the ARV. So I guess my big question is -

Deal or No Deal?

Thanks for the feedback in advance. :beer

2

If recent comps(last 30-90 days) support the appraisal and you can do the rehab work necessary for 35K then yes it sounds like a good opportunity. With fires you have to be a little more cautious so proceed accordingly. I would try to get it even lower than 40K at the outset. Unless you are embarrassed by the offer, you’ve offered too much. Good luck.