Deal Analysis - The Roof Smasher

[Eric Metz]

This will be my first time posting information regarding a lead i have gotten. I have not closed a deal yet, so I force myself to remain emotion free and not try to force something to exist when it doesn't. On the other end of things I am new enough and have enough money into this without profit, that getting a little bit of a return would be better than no return at all! So without further ado.

I'm guessing this made you cringe, right?

The facts:

Damage is from a tree falling on house. Owners didn't have cash to fix it so they just moved. They have a private loan on the house which they still owe 3k. I talked them down to taking that 3k.

2Bed/1Bath

1176 sq/ft

Here is the county data:

I have no idea how much it would cost to fix that area of the roof, or if it is even fixable. I looked through the windows at the rest of the house and it mostly seemed in good condition. Actually had nice hardwood floors in the back of the house. I couldn't visibly see a lot of water damage on the inside through the windows, but I am sure it is there.

The reason I think there might be value in this property is it's location. It is located about 10 blocks away from the major university for Little Rock, Arkansas. I noticed that 2 houses down lived 2 college students. I tried to strike up a conversation but they didn't seem comfortable so I went on my way. The house next to it was well kept as well.

Appraised value of the land according to the county was 7k. Most of the lots that have sold in that area recently seem to only have gone for around 1-2k.

Some of the recently sold comps in the area for investor prices purchases are:

$11 sq/ft - moderate repairs.

$15 sq/ft

$19 sq/ft

There were no properties recently sold that required this extent of repairs.

Comps for what is for sale in the area that is comparable is about $20 a sq/ft. None of the properties I see though need as extensive repair as this house. I am assuming a much less $ per sq/ft.

So my question would be, is there something here? My mentor said I should shoot for 2k, but I didn't really get much reasoning behind that value. I have no qualms with asking, but if they cant cover the load, then what is the point? I am wondering if I shouldn't just get the property under contract and market it. I am just concerned with the numbers. If there is value there to an investor, or if I need more information. Like a contractor giving me a price on fixing it or if it can be fixed. I don't have a lot of money to put into a contractor.

Tips, ideas, lifevlessons... im open ears.