Free house, possible to make profit?

Question

so basically I am looking for my first deal. Found a house that looked like it was half way flipped with a for sale sign. Called the number and a lady answered, she said her husband had a heart attack and can not finish repairing the house. There is a new roof and some new windows. The inside is completely gutted and some damage.

She originally wanted 8k to atleast cover the cost of the roof but I told her that I can’t pay that with the state the house is in. I told her I’ll take it off her hands so atleast she won’t  have to pay property taxes.

I talked to the neighbor and she said the area is pretty good. Lived there since she was a kid and never had a problem or had anything stolen. I would say a house in good condition could sell for 80k in this area.

I have some basic construction experience so my main concern is getting the electric plumbing etc. Siding also needs to be put on the outside of the house. Does anyone think this flip could be done for less than 25k?

John Hein · Answer

thanks for the replies everyone. Definitely don’t think this purchase for me. I think I will try to wholesale it, maybe make a quick 5k.

Nathan Gesner · Answer

I don't know anyone on this board that could answer your question. Study the market to determine what the home would sell for. Get bids for the work you need to hire out. Add your material costs and labor for the parts you can do. Then analyze it like you would any deal.

Based on what you've told us, you don't have any experience and you don't have money. I think your better option may be to find a flipper and "sell" the deal to them for a fee.

Brian Pulaski · Answer

I would get a solid rehab budget before moving forward. You may find out the costs are more than you expect. If the house needs a complete rewire, replumb, new hvac, all walls brought to current insulation codes, and then all new flooring, drywall, insulation, kitchen, baths, doors, trim, etc... I could see this scope being double your budget, possibly more. I wouldn't go into a deal blind, I would get a solid rehab cost and a solid ARV and let the math tell you if it's a deal.

Brian Ploszay · Answer

I looked up where Freedom, PA is located.  Looks like a nice town, but one that probably has limited economic prospects.   It is close enough to Pittsburgh  - so maybe it could be a decent deal.

Jeremy Taggart · Answer

@John Hein What's the address of this place? I'm familiar with the area. Might be able to provide some insight.

John Hein · Answer

@Brian Ploszay

I don’t actually live in Youngstown. I live closer to Pittsburgh, it won’t let me change my location. The house is located in freedom pa. Much nicer than Youngstown but still pretty crappy. But it is safer for sure.

I’m not sure if I can post pictures on here.

Thank you for the reply

Brian Ploszay · Answer

You are from Youngstown, which has areas that are blighted.  I suspect there are plenty of cheap houses.  In an area like Youngstown, it might be a better strategy to purchase a foreclosure that needs minor to medium repair.  Your free house plus the substantial construction costs needed, might not pan out.  Your 25K rehab budget sounds light to me.

Free house, possible to make profit?

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