Is this a good Deal?

[Timothy Greene]

Hey BP,

There is an opportunity for a distressed property and I am wondering if it is a good deal. It is in East Atlanta on flat shoals road which is a busy road. It is a 3/1 that I would probably covert to a 3/2. Has a big back yard and a partially finished basement. The purchase price is 173.5k and I am estimating around 75k depending on the contractor. Since its a busy road that made me skeptical I pulled comps on the same road. These comps went for 330k but had slightly larger SF. I am thinking I can get 315k for it. Is this a good deal? Should I pull the trigger on this one?

Thanks

[Luis Barberi]

Take the 70% of ARV Rule. Purchase Price = (ARV * 70%) - Rehab

So, if you are saying comps are $330K and yours is a little smaller say it would sell for $315K.  

70% of $315K is $220K - $75K you need to buy the house for $145K.  

Don't forget holding costs, buying (taxes, etc), selling, overages, 6-12 mo electricity/water/trash, etc

It may be a tight deal at $173.5K