Real Estate Broker · Indianapolis, IN · Member since 2014 · 3k+ posts · 2k+ votes
I've been looking for a property to flip for a few weeks now and came across a HUD that after speaking with the agent on it they are simply trying to unload it. It is in an area where all of the schools are rated as a 9. It is on almost an entire acre of land and backs up to a state park. The home looks like it really only needs updating/basic work. Carpet, kitchen, and some paint. There are two homes next to it that Zillow values at between 150k and 185k. Which I know isn't the best thing to go off of. The property is about 15 minutes from the high school, mall, and shopping centers. It is a 1900 sqft 4bd 1bath. They are asking 50k. My thoughts are even if it needs 30k worth of work and I can get it for 40k I should be able to turn a profit. Or..... It could be a good rental for someone wanting privacy. What are your professional opinions?
It is overpriced at $59k (I wouldn't pay 40 for it) yet Zillow says it's worth $139,582. It's currently rented at $350, but Zillow says I could get $668 for it!
3. How big of a risk would $40k/$70k be for you? Would you pay cash or finance it? How much would it hurt if you lost your investment? Many things to consider that others may not be able to advise you on.
I'd figure out what your comps are. It sounds like you are competing with the entire town in this case.
What have 4/1 properties sold for recently? If you are looking at 70k as an investment, there are better be several properties that sold for 100k or more. (70% ARV "rule")
Do you have space and plumbing to add a bathroom? 1 bathroom places aren't awesome, anywhere. Especially not for larger families. Even more so for families with teenagers.
The only real use Zillow has in this scenario is telling you the physical location of homes that were sold recently. Not a bad too for pulling comps if any exist.