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Updated about 7 years ago,

User Stats

55
Posts
22
Votes
Nichole Ovens
  • Rental Property Investor
  • Boulder, CO
22
Votes |
55
Posts

Which property? $25k gut/rehab or $55k/light rehab

Nichole Ovens
  • Rental Property Investor
  • Boulder, CO
Posted

Hello BP community,

My money partner is out of town and I have two potential off-market deals that I will probably need to pull the trigger on or lose. 

One is rentable at $650/month in as-is condition for $55k. It is an 800 sq. ft 2 bd/1ba in a B neighborhood circle off the main street.

The second is a slightly bigger 2/1 that could be expanded. It is completely gutted all wiring pulled out and plumbing replaced. This one would be a cash deal at $25k.

The owners for the $25k house don"t have much wiggle room on price. The owners flipped the house next door and sold it quickly for about $84k. A nice new 2 bedroom could rent for over $900/month.

The $55k house might have some wiggle room, but houses under $100k in the area are swept up usually in less than a week on the MLS. The $55k house probably could use $10k to fix or $25 kto make it really nice (like an airbnb). Houses surrounding are in the $80-$120k range. It could also rent in the $900 range if it is fixed up really nice. If it is just decent it would rent for at least $750. The owner might be willing to owner finance some or all of it with a decent amount down. But I don't know how to structure an offer that way. I thought I could offer $45-$48k cash or $55k with owner financing.

Any recommendations or things I should consider? I am leaning towards the more expensive house because it would take less work to get it ready to go. My partner though has dreamed of doing a full rehab/flip...I am a little worried about the risks.

Thanks in advance for any wisdom you have to share.

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