How do I determine a good price to offer on a family home.

[Anne Laurenzi]

My father-in-law is looking to move out of his house that their family has lived in since 2005. It's a 4/2, 2100sq/ft typical ranch style home in a very nice area. Zillow is showing it's value at about 200k. It needs work. It's very outdated, needs new flooring, kitchen and bathrooms need renovation, yard needs some work, probably needs new water heater. My plan is to see if he will let ME reno the house, HE sells it, and then he pockets the before work value (plus a 10-15% bonus) and I get my renovation costs back and the profit. 
My questions are;

What's the best way to value the house in the current shape that it's in? I know Zillow and the like are not the best way because they don't take into account the condition.

If I get an appraisal done, does the appraiser take into consideration the condition of everything? Would a real estate agent be a better option to value it?

Is it going to appraise at what he would get if he tried to sell it right now as-is? 

If it appraises at say 150k but needs 50k in work to clean and modernize it, will it then only appraise at 200k after the work? 

My biggest concern is how to come to a price to offer him. I'm not trying to scam the guy but I need a way to offer an amount that nets me a profit to make it worth my while. 

I know some of those questions are hard to answer specifically without seeing comps and the house or area, but in general, is this situation usually a good deal? I'm basically getting a "loan" for the house since he will just be paying his regular mortgage and I just have to pay for the renovation (which I can probably get a loan for). 

Thanks in advance,

Mike

[Brian Varmuza]

Hey Mike,

It is very difficult to answer your question without knowing the property and being able to look at comps. Lets say Zillow is correct and the house is worth 200k. A lot of factors come into play. What is the amount owed on the house? Is it at or more then that? If its less, how much is your father-in-law looking to sell it for? If he owes 150 for it and in its current condition its worth 180 but if you put 30 into it its worth 240 then you have to work those numbers. So the two things we need are:

What are the comps of a fixed up comparable house selling for?

How much is it going to cost to fix it?

Once you figure out those two things you can find the answer to what will be worth while for you to do it, if at all.

Lastly... and this would require more thought! What is your relationship like, sometimes its best not to work with family because if something goes wrong and each blames each other it can ruin a relationship.