Can you help me to analyse this property?

[Jung-woong Han]

Hi, my name is Han and I am totally new. Even though I don't have fund right now I was trying to analyse deals and found this house on Realtor.com.

Link is http://www.realtor.com/realestateandhomes-detail/1...

It is 45k and it had been on market for a while, neighbor houses are from 80k to 120k. Can you teach me why this house is not so attractive to investors?

[Jung-woong Han]

By the way I am not familiar with Baltimore area. I am looking into flipping houses market and want to start small. So Can you share wisdom if you are willing to.

Thanks.

[Kevin Siedlecki]

@Jung-woong Han - you need a lot more info to even get started on an analysis. There are obviously no appliances in the place- you don't know what else the previous owners took with them when they left, or what damage they caused or has been caused since. There are dozens of reasons this could be a bad deal, and you really can't know any of them until you get in to see it. 

If by starting small you mean starting inexpensive, then you are going to be dealing with a lot of issues with condition and neighborhoods. That's true for any strategy. I would say starting small would be taking on a house from a motivated seller that needs just a little updating, putting in that work and taking a small profit. That's the right way to start small, again, whether you're flipping or renting, the message is the same. Don't be tricked into thinking starting cheap is starting small!

[Account Closed]

Who says its bad? Cash flow, the goal, is derived from rent minus carry costs. Repairs+ purchase has to equal a refinance that returns your money, where the payment+monthly carry costs are less than the rent you get. The more cash flow, and the less money you laid out to get that cashflow that the refinance didn't give you back, the better.

[Carlos Tavares]

from what I seen on pic the house is too narrow/small with no driveway , it's a single family with not much appeal that's mph

[Jeff Bridges]

Show me the comps/recent sales that went for 80 to 120? I only see two recent comps within blocks for 22k and 38k. Redfin estimates it at 43k. Heck, the house you are considering is a comp! It sold for 45k in November 2015, so someone is selling it for exactly what they bought it for one year ago. Why? That is a very good question I'd be asking the listing agent, or I'd just silently make many assumptions why they also thought it was a bad deal and hoping to dump it to another investor. The photos from the last listing shows the seller did no additional work to it since purchasing... My take is its worth exactly what its selling for.... and it wouldn't get a huge bump in appreciation at all from doing full renovation either.

Some advice: make sure to only use recent sale comps for references when analyzing for value, and make sure they are like for like products. Take a look at redfin/zillow combined instead of realtor. They show more price history and better sale comps on the property pages and have more MLS data so you are better informed.

[Jung-woong Han]

@Jeff Bridges - Thanks for your input. Price that is 80k to 120k was from Realtor.com but it wasn't recent sell. It was estimate value. I guess I was totally wrong. That is what newbies do, right? 😄

[Jeff Bridges]

Yep, total newb play! But I wanted to be nice. Those estimates are algorithms of comps, but they might aggregate anything 1-2 miles away. That might include fed hill or another nice area for example. This is why you need to use comps only within the neighborhood and within a few blocks if possible in same condition/ bedrooms/ sq ft/ etc. redfin did a good job in estimating a more accurate value for that property however... but even then, you need to verify against your own research of comps if you were to take seriously. Baltimore is also very neighborhood oriented in terms of quality areas, so you need to drive your neighborhoods and know them pat before you consider buying in a specific hood. I'm not a baltimore specialist however so  wouldnt be able to help point you in the right direction, but I know enough that baltimore city is not going to be my farm area anytime soon due to low tenant/neighborhood quality in many areas and high prop tax.

[Ned Carey]

My gut tells me that is an OK price for that house but no bargain. $120K would be an exception in that neighborhood.