First Investment Option / Opinion

[Thomas Ellrott]

Hello everyone!!

So my girlfriend and I are looking in the Southern California area for an investment property to turn into a rental. I came across a sweet wedge deal online. It is a 3 bed 3ba two story single family that is on short sale. As of December 15th the cost to close was $429,000, and in the same neighborhood there have been 3 similar layouts selling from 550,000 - 600,000. I had my realtor look into any possible issues with the property and we got back the following:

Final sales price will be determined by the bank. Kitchen has had an active leak- source unknown- that has damaged most of the cabinets, master shower and tub are non-functional, AC unit needs to be replaced, garage door needs to be replaced. Master balcony leaks into the garage. Dry rot too.***Short sale***Shortsale approved- There is a $60k lien from Save Your Home CA, HOA in arrears plus a judgement and the cost of the negotiator. As of Dec 15th cost to close is $429k. The number may vary as more time goes on.

We work in the A/C industry so we have access to most contractors that can do most of the plumbing / drywall / AC for a very low cost to us. The biggest issue I see is the existing dry rot and the 60k lien from KYHCA. 

My questions would be has anyone dealt with dry rot on properties before? What would be the estimated cost to fix the issue if it isn't extensive and can be accessed (I am assuming dry rot in garage the way it is described). Would this property be a worth while investment on a first go or would you suggest going with a easier property? (I tend to be very aggressive and head strong in my investment strategies).

Any input is greatly appreciated.