First Deal Potential, Please Help Me Analyze!

[Steven Leigh]

I started investigating this deal as a learning exercise, but now I'm actually considering it as my first deal. Please give me some help in analyzing it.

3 bd/1 ba in a suburb of Dayton, OH Probably a B property in a pretty quiet, family-friendly neighborhood once renovated.

It sat abandoned for a few years, was a rental before that, and was a bit trashed. Investor bought it in foreclosure for about $33,000, but had too many houses close at once and doesn't have time to rehab it. They put it up for sale for $55,000 but if it doesn't sell, they will eventually rehab and turn it into a rental. They will do owner financing.

One estimate for repairs is about 12k to 15k, but I'm figuring about 20k to be safe. I can do most of it myself, but may need to hire out a little too. I can list out the types of repairs later, but for now let's assume $20k is a safe estimate. (Obviously I will get serious estimates before going forward.) I think I can borrow the repair costs from family or a local lender.

Other homes in the area have gone for about $90-100k recently.

So here are the options I'm considering. Please weigh in on both if you have time.

A: Renovate to selling quality for 20k (maybe less) and put it up for sale with a realtor. Assuming it sells for $90k, what other costs are involved, such as closing costs, taxes, etc. that I might not be factoring in? Do you think there is enough margin to make money?

B: Renovate as a rental, maybe I can do it for $15k with good materials, but not high end. This will help the margin, but obviously I will have to pay the payment for the $55k, plus pay back the repair costs over time. I think it would rent for $800-900 a month. How would you calculate whether this would work as a rental? Please be as detailed as possible. I'm very new to this.

Thank you greatly in advance for your time and attention.