Im looking at some property and the prior sale price was $63,000 a bank has the property needing repair for $35,000 .Sounds great but I see homes in the area similar to this one listed for $35,000 to $80,000.Mid west region by the way.
Howdy Canpbellgroup:
You just need to compare the deals. If it needs a lot of rehab it may only be worth $35K. The ones that are listed at $35K are probably as bad or worse than yours. Also compare the footage and everything else you can.
Hi tedjr,
Ive pretty much done that .We went to pittsburgh Pa in the spring of last year and they were practcally giving houses away .No one wanted to live in the city area it was like a ghost town I thought about buying a dozen of them and rehabing them but who would buy them or let alone rent them .
You need to get comps. Go to your friendly Realtor and get comps for homes in the same area. These comps need to be for sold homes only.
Sold in the past 6 months. If your a 3/2/2 the comps need to be for 3/2/2’s . Close to the same size Lot’s.
Yes you should drive by the comps and make sure they are good comps.
Now take the ARV and multaply it by .70
Then subtract the rehab cost + 5%
Then subtract the holding cost {insurance,taxes,utilates}
Then subtract the cost of the money
Now what you have left is the very most you you can pay for the house.
Start bidding low. That way if you need to you can always go up.
;D
Bruce
thanks for the formula IndyBruce,
But as I was saying theese homes that sold for $80,000 6 years ago are selling now in repaired shape for $40,000