hi i have a possible wholesale deal and i wanted to run the numbers by you guys the house is under contract for 1000.00 its a 1 bedroom 1 bath house the repairs will be 25,000 to 30,000 depending on the contractor the arv from zillow is 70,000 and i think this is a deal please advise thanks as always for your input :help
Is the ARV from Zillow from the Zestimate or are you getting comparable sales in the same area. Zestimate is not always accurate thats why I’m asking.
thats the zestimate i did some other comps and they are running 30,000 which sounds more realistic for this area
Even so I wouldn’t rely on Zillows comps either get an appraisal or realtor comps for a more accurate ARV.
say the numbers are accurate as i stated would this be a good deal thanks
The bottom line is that you need to get comps from a Realtor. Why? Because your prospective buyers will get comps from a Realtor.
Let’s say Zillow says $70K, but your buyers get Realtor comps from the last 3 months that say $30K. Then you’re stuck. No one will want to buy the house.
Just my 2 cents.
Be aware that even accurate comps can be hard to figure out in this current declining market. Here’s what I mean: Something that sold in October for $30K might only sell today for $20K - at least in your buyer’s minds. So depending where the house is located, whatever the comparables are, you might have to assume a 10% price drop.
Is the price on the house $1,000.00 or is there a type o?
Did you get your estimates in writing or are they just ball park? For that much work on that small value of a house the estimate could be still low. Be careful unless you really know how to estimate rehab work or a contractor has done a thorough inspection.
As an ex-appraiser I have to agree with the other posters on not relying on zillow. I’ve seen their estimate off as much as 25% on a $400,000 property. Think about that before trusting them. As far as real estate agents go they are somewhat better but be careful of them also. Ask them for a property profile and make you own determination is the best course.
I’m in the process of writing a free report on how to do your own appraisal and will offer it here when complete.
Good luck,
donrock
no that wasnt a typo i have it under contract for 1000.00 and im trying to get 2000.00 for it i have an extensive construction backround and the reha estimates are on the high end and the 30,000 comp is not from zillow is this a deal thanks
If the comps are 30k and the rehab estimate is 25k-30k there is no way this is a deal. If you assigned the contract for 2k and the end buyer put 25k into the property the buyer would lose a lot of $$$$ and waste a lot of his time rehabing a property to get negative equity.
Perhaps this is a good deal from a landlord’s perspective…if $30K is sunk into it and rents are at least $500/month.
i think it will rent for more i thought it would be a good deal for an investor who likes to buy and hold
Eric,
I’m not trying to bring you down but put yourself in the landlords shoes. Why buy a property and sink all that time and $$$$ rehabbing the house for no equity at all. Wouldn’t you rather buy the same type of property for 30K that is already in move in condition and save yourself a boatload of time and $$$ and be able to put a tenant in there right away? No successful landlord is gonna look at this as a deal!
i understand what your saying but i think that if you buy a property for 2k and put 20k into it and the comps run the property at the mids 30’s then it’s a deal and if i had the money i would do it myself but i dont