Trying to wrap my brain around it

[Thomas McGee]

I'm trying to wrap my brain around this recent deal that went down in my area. I was thinking maybe this should be in the Investor Psychology forum but decided here since it was a flip/rehab property.

Property specifics: Asking $171k - 2006 sqft corner lot 8,700 sqft - 4 Bd 2 Bth - 1 Family - 1 dining - 1 living - 2 Fireplace - 2 car gar 

Market: Las Vegas

Average selling price in this area for a move in ready home is 200k or $100 sqft and climbing, some homes selling at $120 sqft. Prices here are so ridiculous they are getting back to bubble prices again in a hurry. 

Anyways, as a newbie home rehabber I walked this house and gave it an evaluation of roughly $50k-$70k in repairs to make this house closer to the $120 sqft side of the ARV. Other relevant aspects that need mention for repair evaluation - HVAC unit is inoperable (not listed in the listing, but known from previous owner), there are areas of permanent construction that need to be torn down due to no permits, carpet replacement, total bathroom overhaul, complete kitchen remodel, yard maintenance, inside / outside paint, stucco repair, electrical repair and other interior cosmetics and so forth. But those are the major ones. Basically you'd have to rebuild this house from the studs up to make it right.

What I want to know is, am I off? Is this house still profitable from an investing stand point at the price that was paid? This house sold for $166k

A quick recap: Asking $171 - Sold for $166k - Needs minimum $50k in repair IMO - Maximum ARV is $220K

Frankly I don't see how it's possible to make this house right with less than $50k in repair. Maybe it's possible to do $30k in repair and make it livable ready but not move in ready. But even at $30k in repair plus holding time of 90 days, making the ARV about $200k, I can't envision this being a good buy for an investor / rehabbing type endeavor.

Just looking for some outside input, that I'm not the crazy one. LOL

Here are some images to help with your conclusions.

This is an extension

of what is supposed to be an open entry way to the front door. They enclosed it without permits. You can the stucco of the original outside of the house on the bottom left.

This is the enclosed room to the front door. This is looking toward the street outside.

Master Bath

Outdated tub

Outdated cabinetry / sink combo.

Master Bdr - Fire place is nice but needs remodel, wall unit ac is yuck IMO.

Outdated kitchen

Lots of loose electrical like this, just hanging out randomly in several areas.

There's many more pics, but just with these I'm sure you get a good idea of the extent of the scope of work needed to be done to not only repair the home, but to bring it into the 21st century.

Your thoughts?