Vacant House Gut Question

[Tabitha Fox]

Hi all!

I'm new (haven't posted in the newbie section yet, will do shortly!). There's a vacant house in my neighborhood that I'm interested in. I'm going to send a letter to the owner on file and see what the deal is on the house. Via tax records, it is a 2/1 on about .3 of an acre. I stopped by yesterday and looked at it up close. The car that is sitting under the carport has tags that expired in '07.

I knew the house needed pretty much a full gut job and looking at it up close, I was right. Windows, doors, roof. It doesn't have a central HVAC unit (had an oil tank outside). I couldn't get inside, but there was one window that was broken that I could get a peek into. That room is where the roof was leaking and the ceiling had fallen down and the walls had lots of mold/mildew on them. I did see a set of French doors, which I love, but I couldn't see the rest of the interior at all. It's under 1,000sq ft so maybe it won't cost as much as I'm thinking to rehab.

The brick foundation looks to be in very good condition, no cracks. Half of the house is on a very tall standup crawlspace/storage. 

My question is, at what point is a house too far gone to even consider rehabbing it? My amateur guess would be that it could be worth mid $60K's - $70K. 

I stopped at a house that is being rehabbed and spoke to a guy there that does electrical, plumbing, and some other stuff and we chatted for a while. We spoke about cost of certain jobs, so I got his name and number for future reference.

Since this house needs a good bit of work, I was thinking about keeping it as a rental. I highly doubt we could make enough on it as a flip. Plus, it could help comps in my neighborhood, instead of just being abandoned.

If it was a flip, based on the calculator at an ARV of $60K, $25K in repairs (maybe that's a high number? Or low?), I wouldn't pay more than $17K for it. I really don't want to pay more than $10K.

Sorry that was so long! Thoughts?