Estimate on Repairs for a Newbie/Live In Flip? (Pics included)

[Greg P.]

Hi BP,

I am interested in a home that will list soon on the HUD. Since this is my first deal, I am thinking about living in the home as an owner occupant for a year while rehabbing the home. My goal is to finish the property and keep it as a buy and hold / rental.

My question is on estimating 'rough' rehab numbers on this property to see if this would even be worth doing. Similar homes in this area (after repairs) have sold in the past year for ~105k. That's where I'd estimate my ARV.

The tax appraisal for the property was 78k, and I'd plan to offer 65k, given that it is an older home (1963) and from the pictures would need almost everything inside redone. Rental comps have three bedroom homes in this area renting for 1,200, so the cash flow for the cost of the house is what gets me most excited (although feel like there is appreciation opportunities after fixing it up).

So, I'll just post the photo album here -

http://imgur.com/a/RMx8z

I'd love your thoughts as experts on if you feel like this would even be in the ballpark with the photos. To me the kitchen, floors, walls, outside paneling would all need to be redone. Coming up with a repair value is where I'm most concerned. Hoping I can do an actual walkthrough in a week. Look forward to hearing from you, thanks!

[Kuba F.]

That would be hard to tell without knowing square footage, or looking at what the other rentals in the area look like to see what people expect.  It looks like it's in decent shape, so if your goal is to eventually rent it out, then in that price range it doesn't look like it needs too much work.  Paint $3ish/sqft and floors $3-5ish/sqft would go a long way .  It's a large kitchen, so depending on the amount of work, it could end up eating your budget. You could just clean or paint the cabinets if they are serviceable, or you could tear it all out and start over. What you should also really look at are the replacements, roof, hvac, plumbing lines, windows, to see if it makes sense for you.