Offer accepted for run down house in Los Gatos Mountains @450k

[Preeti Tibrewala]

Hi,

Offer accepted for run down house 1bed/1bath in Los Gatos Mountains @450k. 

Lot is 0.26acres, most of the lot has steep downhill slope. Lots of trees and house has septic tank.

Do you think it is a good deal? This is our first flipper home so would love to get pointers and thoughts.

We are planning to fix it and put it on long term rent or make it short term rental like airbnb.

If it was your home what would you do?

Thanks for your help and insights!

[Lance Hulsey]

I am a Santa Cruz area investor and Broker. 

If it is on the Santa Cruz County side of the hill you may have some challenges with Septic & Leach Field and Insurance (if not a perimeter foundation). State Farm is the only insurance company not using the California Fair Plan option for fire insurance. See my previous comment about a perimeter foundation though. We had a fire two years back and fire victims get first-in-line status for any permits for rebuilding, remodeling, etc. Not to say you can't get a permit. 

Lastly, $450K may not be a good deal if you are only buying a 1 or 2 bedroom cabin in need of work.  More info needed.

Those are the two main gotcha's to watch out for.