2/1..What would YOU do?

[Christopher Hutchins]

Greetings folks. About 4 months ago I identified a property with some potential for flipping or renting while driving for dollars. I pass this property frequently, and get excited every time I see it.  Here are a few particulars.

2/1 single family home
Approximately 950 sqf
B-/C+ neighborhood 
Great school district  (Cobb County)
1 1/2 acre lot
Short distance to shopping areas
Interior down to studs (as seen from the street since the front door is open as well as windows)


I have gone through county records and identified the owner. Taxes on the property are current, but it's definitely uninhabited. I plan to make contact with the owner next week via cold call if I can obtain a number, or mail. As far as I can tell, the ARV is around $99,000. Without having seen the inside up close, I would guess $35-45 per sqf would suffice in a worst case scenario for rehab. I would love to offer a max of $25,000 if the owner is interested in selling. I would likely use hard money for purchase and rehab should I get that far.

Rental estimates in the area for comparable homes range from $900/mo to $1000/mo.

Assuming I can obtain the property, should I attempt to rent it out? Or would it be better to flip?

Something else to consider. My wife and I are currently renting a 3/2 and are eyeballing some homes to purchase in the next 10 months. That time will be used to beef up our savings for a down payment on a home. We're looking to purchase a 4/3.5 single family home of 3,000 sqf or better, seeing as we have 2 kids under 5 years old, and I have a 16 year old from a previous marriage that visits from Florida occasionally. If I could obtain the home descibed above, we would also be open to razing the home and building a home that suits our needs on the lot. The thing that makes this an attractive option is the lot size. Another option is to rehab and rent the home, and then work with the county to divide the lot and build on the back 3/4 to 1 acre of the lot. Anyway, enough dreaming on my part, what type of direction would YOU take if this were your investment? I have a vision for this place, but I'm open to just about anything if I can get my hands on it. All thoughts are welcomed, thx.

[Josh Sohar]

There are multiple strategies one could use here as you described. Depends on what you want to do personally. Does your current job situation allow you to save up enough in 10 months for a down payment on a home for your family? If not, maybe flipping would be a good way to get the capital you need for that. If you can raise the funds for the down payment, then maybe a bit and hold situation would be a better long term plan. However, make sure you want to be a landlord or are willing to pay for a PM. What would this property cash flow per month? Run the numbers in multiple scenarios to see.
Good luck!

Dividing the lot is potentially a lot of work and money and not sure how easy that is to do I. Your county, but I'm not the expert.