My friends house is in limbo

[Tyler Bemesderfer]

So I'm starting out. In the education phase and I'm kind of just poking my head into places to ask questions and look at things that pique my interest.

Anyway, I've got a friend of mine that lives with his aunt. The aunt owns the property and owes I think he said $115k on the mortgage. The house is in rough shape. Years of cats and dogs tearing the place up, it's got mice, it's got bugs, wouldn't be surprised if it's got mold too. It's got foundatuon issues, the roof is probably shot, the electrical was ran by Edison himself, and the Greeks did the plumbing. First glance the house doesn't look half bad and If Armando Montelongo could make money off his cat house in the middle of the 08 crash. Someone could do something with this house I'm sure of it.

So a wholesaler contacted them and forgive me, I only got bits and pieces of what actually happened so I may have some details wrong. She got an email from some we buy ugly houses company and she called him. Some guy came out to look at the place and told them he could get them $150. Next thing I know the house was inspected the offer changed to $75k and my buddy's aunt told them to shove it.

The house just may be too far gone, but here's what's got me curious, with the way the market has been and what I've seen in some of these neighborhoods I've been in lately I've seen smaller and older houses sell for much more than what the suggested ARVs are. So I poked around on Zillow on the map just looking to see when the last time a house sold and the most recent comp I could find was a mile away from 7 years ago for a house with 1 less bed and bath for 100k.

How can you tell the value of a property that's in a neighborhood where nobody is selling? How do we get that to change because I imagine once a few houses sell in that neighborhood and catch up with this decade my buddy's aunt's house will be worth fixing.

Let's connect. Follow me, send me a message, let me pick your brain and I'll tell you about the neighborhood in northwest Georgia that hasn't been touched in the better half of a decade. I've driven through that neighborhood too, it's a nice quiet location, most of the houses are really pretty with lots of land and forestry.

[Richard Balsam]

I know a lot about the N. GA area since I've lived here for over 22 years. Just because there are homes elsewhere in the same town doesn't mean their value translates into a comparable value for this home. If a wholesaler lowered their price by half- that tells me a lot. You're saying the home is in very rough shape. That says a lot too. The seller may be unreasonable, as many feel their home is worth more than the market will provide. It's not just the physical condition you see that determines value. It's location, location, location...right? Then, subtract all the repairs needed. Not just the repairs though. Many folks forget about the hidden costs associated with a used house - that add a ton to the cost of repairs. For starters, how old are the sewer lines? If they are old, are they lead cast? If so, most codes require them to be replaced. Lead paint on the walls? Abspestos anywhere in the walls? Is the electrical panel up to code...or wiring made of aluminum - or not 15 amp service? Is the home on sewer on septic? If septic- when was it last inspected, or does it need to be replaced? That's easily $10K++. Is there HVAC service - with ductwork installed? Then, we can discuss the physical condition of the foundation, mold issues, termites, etc. Tons of things that aren't apparent with a walk through that have deep expenses to fix, before even getting to the layout and upgrade to make the house "pretty" enough for the market to agree on a price. Since this house is in an area without recent comps, I would be afraid of all the upgrades to have a home sit without a buyer in sight. Maybe she should take the $75K offer - assuming the wholesaler can find a cash buyer at their markup...I have my doubts from what you had described about the house. Most homes are relatively easy to comp and repairs are readily defined before a cash offer is made. This house sounds like it wouldn't fit easily into a standard cash buyer's portfolio - since other homes would be easier to upgrade and sell. I hope this helps.