Knowing when a REO is beyond hope

[Josh Welch]

Hello everyone! This is my first post as a new bigger pockets member of only a month so I hope my question hasn't been asked already! I am trying to decide if a HUD property is worth any more consideration for a owner occupant FHA 203k rehab loan than I've already given it. I know everyone has their own tolerance for how much rehab they are comfortable with, but I wanted to poll the community and see if there are some major red flags any investor would feel uncomfortable with. Here are the facts: - 2 story MFR in Dorchester, MA (up and coming suburb of Boston) - 6 bdrm, 1 bath per unit - traditional block foundation, wood frame, New England tile siding. - Listing price on HUD $365,000 - Comp a few doors down with almost identical layout (1.5 bath vs 1) sold for $399,000 last November. - approx ARV $400k - rehab costs are extreme but unsure at exact estimate due to my lack of experience but at least $40k After a physical inspection here's what I noticed. Severe sloping of the floor of entire right side of the house both levels, wood of front porch could break if the next 250lb+ person walked on it, wood rot on Windows, acoustical ceiling tiles, no appliances in kitchen, complete overhaul of bathrooms needed, the list goes on. Is there anyone in the community that has experience with MFR HUDs that could maybe share their story or experience with "homes beyond hope?" Bonus points for Boston investors! Many thanks, Josh W.