This home just came onto the market and its a foreclosure…
The asking price is 34500
It has brand new vinyl siding… 3 bedrooms, 2 baths and is roughly 1800 sq feet…
The interior has decent carpet, windows, kitchen cabinets, and it even has what looks to be a fairly new heat pump…
The interior walls are mostly paneling which i think is ugly… But as a rental would be just fine… There is also a detached garage…
Overall very nice and would rent for 600 to 675 a month here in ohio where i live…
taxes 40 per month… insurance 40 per month…
I’m thinking about offering full asking price of 34500 or should i offer 35000… I’ve heard that some foreclosures get higher asking prices… But i’m not sure… any opinions on if this is a good deal???
The only thing i would have to do to make this rent able is buy appliances and put them in…
should i offer more to make sure i get it or what??
What have the houses just like it in the same neighborhood sold for in the last 6 months? That will tell you what the house is worth. Then you offer 50% of that number.
Think about it like this. If someone was selling a dollar bill, would you pay a dollar for that dollar bill? Of course not. Just like you need to get the dollar bill for 50 cents you need to buy the house for a 50% discount or you don’t have a deal.
well to me… i’m buying this for long term… as a rental… 255 piti payment a month… rent for 600 at least… leaves me with 345 a month… i know there are vacancies, repairs, etc… but with 345 a month extra a month I think i will be fine…
Let’s apply the 50% rule see what it looks like.
Gross income - $600
Operating expenses- $300
Debt service - $232.
Positive cashflow - $68. That’s a bit too low in my opinion. Not a horrible deal. I’ve learned that $100/mo. per unit is the minimum you should accept.
(A $35K mortgae at 7% will give you a P&I of $232/mo.) I find it amazing that you can rent an 3bed/2bath home for $600/mo. That’s cheap. Is that the market rent for houses in your area? I’m in the northeat and houses rent for $900-$1000/mo. I’d LOVE to find a home in my area for that price that needs little work.
Prime and paint the wood paneling. It will look TONS better and you’ll spend pennies doing it. We painted the wood paneling in our apartments a “toast” color (think of a light taupe color) and painted the baseboards and all other trim bright white. It looks great for what it is. I would offer under asking price and see where they are with it.
Phlemboy,
A lot of mid-west and southern areas are affordable like this and didn’t have the rediculous run-up in prices that other areas experienced. Ellis’ numbers are pretty similar to what we’re expecting for investing in the south.