Thoughts on first fix and flip

[Ethan Miller]

Background information: I am looking to grow my investments and found a small two story, 2 bedroom ~1000sq ft house in a town about an hour drive from me. They are asking $10,000 with an estimated rehab cost of $15,000. I have also comped the area to find once fixed will have a value of around $45,000-$50,000. The current owner has already gutted the place including the plumbing and electrical, however he has upgraded and installed a new 100 amp breaker box and has already started running wires to about 1/3 of the house.

As for plumbing the pipes are still capped in the one bathroom, kitchen and laundry room but nothing past that. Sinks cabinets toilet everything is out. Which with all of this makes it very easy to jump right in and plan what to do.

Needs:

Everything from insulation up to light fixtures down to the flooring and appliances. I even noticed the shingles on the roof seem to start to curl (is not figured into rehab cost yet). I was thinking changing a wall to make it a 3 bedroom and add a small bathroom as well. To see about getting the most I can.

Plan:

I would potentially like to be able to do the work myself for what I can. I grew up working on the house with my father so learned quite a bit. Afterward, would like to rent it out and should be able to get around $550/mo. And would think I can take a HELOC to pull the equity out and use for something else if I understand it correctly.

Questions:

Would this property be a good first BRRR property as it will have to be purchased with cash as it is so small or would something a little bigger be better? This seems like there will be good return with this but mainly from the rent.

Should I be nervous getting in on such a cheap house as how easily would it be to offload later if people can’t obtain a mortgage for it? The area is not the most wealthy for people to regularly have cash for that amount.

How do I know if there are any Liens on the house? As the owner said there isn’t but just to double check.

As I do not have any licenses (ie. electrician, plumber, etc.) to do work am I still able to do the work my self on this house?

This seems to be a great deal but I don’t want to jump into something if I should starting off or looking for something else. Any advice/tips would be much appreciated.

[Don Gouge]

If this house has been gutted to the studs I have my doubts it can be completed for 15k. kitchen and bath fixtures, appliances, floor covering, drywall, trim and paint will eat up this amount. Electrical and rough plumbing will cost you more. No mention of exterior. What is the heating and cooling source? You can apply for permits in your name if you are listed as the owner. I would not advise doing the electrical unless you are a licensed electrician. Too much liability. If you buy the house you want to use a title company to handle the transaction and to issue title insurance. They will find any liens if they exist.