Advice on Buying, Realtor and Property on First flip

[Raj Kumar]

I started working with a investor oriented realtor on my first flip. He sent me a property in Alsip, IL (Chicago Suburb) saying a HUD property which he bid for me as it got re-activated and he thinks its a good deal. I have no knowledge of Alsip, IL until now

House price: 117K

I saw comps on zillow ranging from 140K to 225K. He sent me some comps which are properties in 0.5 to 1 mile radius around 200K-250K. He says that this property should be easily sold between 200 to 225K.

I asked him that some comps are around 140K and he mentioned that we will do some high end rehab with some modifications(adding extra bed room) which should give an ARV ~225K. His quick estimate for rehab would be around 35K.

Master bedroom and 2nd bedroom on the second level. There are 2 bathrooms in the house and both the bathrooms are on the first level. Some of the comps around 200k price range also has bathrooms on the 1st level based on info 

Given this scenario, I have two questions:

1. Realtor says that this property is a HUD property and I do not see this in www.hudhomestore.com . I am assuming that the subject property should be on the HUD homestore even when in the pending state. Do I have to be worried that it is not in HUD home store and realtor claiming it is HUD property?

2. Even if we make high end rehab, if 2nd level does not have bathroom, would this property still be desirable at high price?

It seems there is an opportunity but I want to take steps with caution. Please advice.

Thanks,

[Greg H.]

@Raj Kumar

Once a HUD property is pending, it will no longer show up on HUDhomestore.com

I am in Texas and do not know whether the property is a good deal or not. You say your Realtor bid for you ? I am assuming he has a HUD under contract and wants to wholesale it to you. It seems to me that you do have some reasons to be cautious as a Realtor bringing you one of his deals may not necessarily have your best interests in mind. You might want to contact another agent to get a 2nd opinion on value or contact an appraiser in the area for an informal appraisal($200 or so). Do be hesitant to walk away from a deal that you are not 100% confident in. There will always be another "deal"