I Found a House! (I think...)

[DJ George]

I've been looking for a fix and flip in the Rock Hill/Fort Mill, SC area for a while. It's been really hard to find good deals! I came across a house today that is listed with a realtor on the open market. The owner is motivated and I think its going to be hard to sell because it needs major repairs. Enter me!

The house is HUGE. 4,050 sqft. It was bought as a foreclosure and needed repairs. The new owner decided to gut the entire house- there's pretty much concrete floor and walls. There was a bad roof leak, so he replaced the roof in 2018, and replaced the rotten wood and ceiling. The house has a semi attached 2 car garage that will need extensive work and possibly torn down and replaced. 

The owner bought the house for $159,000 and is asking $189,000. He bought it as an investment to fix and flip, but hasn't had the time to do the work. The house sits on about 1 1/2 acres and has an incredible view of a beautiful golf course hole. The house is in a private country club neighborhood (Country club dues- $7,000 initiation +$500/mo). The closest house in comparison that I could find sold in 2016 for $304,900 and is about 400 sqft smaller with a similar age, layout, lot size and golf course view. Most of the homes in the neighborhood that have sold recently do not have a golf course view and are less than half the size of this one. (~1,600 sqft. Average sales price ~$215,000.)

This is a big project, needing all appliances, toilets, counter tops, sinks, bathtubs and showers, flooring, and sheet rock, with possible termite damage and carport repair.

I'm thinking about offering $150,000. I'm assuming its going to need between $65,000 and $75,000 in repairs (This is a complete guess from just peaking in the windows). Fully rehabbed, I think the property would sell for $325,000-350,000.

Would you take this deal, or would you let it go?

[Brian Pulaski]

The closest comparison sold for $305k and the average sale price is $215k. Whenever you are looking to end up with the biggest/most expensive house, be VERY conservative. I think your $325-350k is much too high, if it is over $100k more than the neighborhood average (golf course or not).

Also a complete from studs renovation with possible termite damage will most likely cost more than $65-75k if you are paying a GC to do it.

I would proceed with caution and get a real solid grasp on the ARV and rehab costs before I made any offers to the seller.