Rehab Opportunity - Is This A Deal?

[Ethan Painter]

I am looking at HUD home for sale in my area to potentially purchase and flip. It is listed at $43,000. The owner/occupant bidding period ends tomorrow night and I would be able to bid as an investor then. I took a look at the house and inspected pretty much everything. It is a 2 bed 1 bath, 850 square feet, built in 1920. It has a brand new roof and rafters, updated electrical, excellent siding, big city lot, and a public bike trail right behind their back yard… Most of the fixes would be cosmetic, but it could possibly need a new furnace, and there is some light water on the floor in the basement, so I would need to potentially change some of the grading arou the house and/or add some eaves. Most of the house has been "updated" by the prior owner, they just didn't do a very good job. (Cheap flooring, poor installation… etc.) Judging by comps within a one mile radius, I would value the house at about $72,000 right now. Rehab costs are estimated at $13,000 with an ARV of $85,000. I have only flipped one property in the past, so I don't have much experience with evaluating deals. Am I missing anything? This seems like a great fix and flip property, but I want to be sure before I bid tomorrow evening.

[John Morgan]

How are you going to finance? It looks alright but I would be sure that the water in the basement is not a leaking foundation. That can cost a pretty penny