Flipping a Farm-Can you help me look at a deal?

[Neil Hauger]

Hey all!  Relatively new user of the site although I am a frequent listener to the podcast.  My question revolves around flipping farms.  I sell farm and recreational land in West Central Wisconsin and I have one for sale I am considering purchasing.  My company is Whitetail Properties.  Not sure if it is proper etiquette to provide to much more info on my business but if anyone wants to know more, contact me.  

Flipping farm land is an interest.  Usually there is a house but not always.  In the case I have in mind there is a house, barns (in need of repair or dem), and 30 ac of farm land.  The owner very motivated to sell as there is a lot of delayed maintenance on the place.  But, for what I think I can buy the home for, I could also sell the land and get it all back-or close.  I am pretty confident in price of land and I also know what renting land brings.  There are multiple ways to make money on this flip.  Rent the house-$600/mo, rent the pole barn for storage-perhaps 10 boats at $300 for the season, rent  the land-$2250 for a year, put up a billboard as the property is next to a county highway with good traffic.  The house needs a well, 7 windows, some drywall work to finish mudding and taping on the main level and to cover plaster and Lathe upstairs.  Wood floors need sanding and finishing.  Kitchen needs flooring, trim work and appliances.  

Outside the house needs some cosmetic repair. A little siding replaced, some fascia  replaced, Deck boards missing.  Easy stuff really.  The buildings are loaded with crap, machines, garbage.  Probably need to be knocked over and hauled away.  Lots of crap!  Every farm has it.  Needs a new well-$8500 is the estimate.  Electric is a breaker box but not to code, furnace working but for how long.  Needs a new water heater soon, installed in 1998, roof is 10 years old, updated PVC plumbing and a holding tank system.  Plumbing was winterized and appears good.  That is the situation on the major stuff.  

A similar home in the area lists at 130K on one acre.  No recent comparable sales so I figure 120K sale price.  I think this home, because it has a pole barn with 3-phase electric and is insulated, would list and or sell for $150,000 when all fixed up.  So, home for $150,000, land value if sold $75,000 =$225,000  

My unknowns are the fix up costs.  I figure $30,000 if I contract it all out.  And I have a contractor I know.  The clean up of barns, and other refuse is the big ??  Not sure what that will run me.  I am calling a "junker" to come look at it. Maybe some value in the old  barn wood, and scrap metal??  

My plan would be to buy the home.  Told owner I am in for $50,000 cash but I think she would really want/take $70,000.  (I have it listed at $90,000- House and 39ac)  My plan:  I budget the fix up at $30,000.  Clean up not sure- $3000-$5000 to tear down barns and take all crap away.  Any opinions or experience here?  Then Rent for $600 on conservative side. Not much available in market but a local realtor told me $600-$700/mo.  Rent tillable land.  Perhaps even put up a bill board and rent the sign.  $1200/yr?.  Math looks like this.  

Purchase: $50,000  -$70,000

Rehab and clean up $35,000

- I am into it for $105,000  at this point.  Rent for home and land brings $9450/year plus a bonus rent for space in barn and perhaps a billboard.  Those are value adds later.  

I figure I am about a 1%er here yes? Thinking this is a BRRRR candidate property. Any input on what I am not considering here? I have spent hours looking at this property. Analysis paralysis!