When Market Value is lower than Build Cost!! (Pics Included)

[Shardae Robinson]

I am learning a HUGE lesson in market value versus assessed property value. Just purchased a foreclosed home in Jackson, TN via auction in an area where the market value of homes (what they are suggested to sale for) is way below the assessed value of the property itself. I got a 1600 sq.ft. 3 bed/2 bath SFR built in 2006 for $61,400, but assessed property value is $106K. Sounds great, BUT the problem is the market value and comps in this part of Jackson, TN are around my purchase price. My dad is a contractor and he could not build this house for what the market value is suggesting. Please check out the pictures to see for yourself.

There are several issues at play in this area negatively affecting the market value and potential price point: 

1. No newer homes have sold for a long while within 2 miles or so (but there are similarly aged, nice homes on that street)

2. The older homes of similar size are so outdated and in need of repair that they won't sale for much; hence, low comps

3. This part of town, North Jackson, is on the list for revitalization by the city; market value is NOT this low for the entire city

I'd love to hear your opinions about what to do with this home and/or experiences with large gaps in market vs. property value. Any tips? Is it too much to think I could sell for closer to $95K with no similar comps in the area?? I would prefer to flip it and sell after doing a little bit of updating (add vinyl plank floors in common areas, appliances, and paint entire interior); however, there is great return as a rental property as well with monthly rent ~$900/month. 

I am not at all disappointed with my purchase. This house is almost turnkey and I love the street it's on. Owners clearly take pride in their homes. It's just the market value that I'm struggling with. Any thoughts are greatly appreciated! 

Front Side Back Bedroom Laundry