Rehab cost on Investment Property
My wife and I are getting real close to owning our first investment property. We found a house locally that is FSBO. I know the owner owes 50k on the house and is look to get rid of it. After a walkthrough yesterday, it needs a lot of work. A reputable contractor told me that based on what i described and with new appliances, 15-20K. Before seeing the house, local comps research and tax assessor tells me no more than 45K for the house. The house is in a good neighborhood and right by a school/park. But the last tenants didn't take care of it at all and it why the asking price is at 57K.
My question is, do I reduce my offer by the amount of the estimated rehab costs (mainly water damage on floor in mud room/bathrooms) or just run as far away as i possibly can.