I am working with a private seller and his house he wants to sell. It is a 3 bed; 2 bath 1.5 story home; approximately 1545 sq. feet. Built in the around 1900. Large 12 x 12 shed but no garage. The owner has added a 2nd bath and has updated them both in the last couple of years. It has some updates such as central air and the wiring has been converted from knob and tube to a standard circuit board. Almost all the windows have been replaced. The roof is less than 10 years old and appears to be in good shape. It has steel siding. The things that concern me are there was some water spots in the basement but the owner says someone put a hose in the window well and left it running. The basement did not have a musty or mildew smell. There is also a spot on the back of the house where some of the brick on the exterior is shifted down near the foundation. The kitchen would need a little updating, not sure about the floor under the carpet in the living room and dining room/ office area. May be able to refinish the floors.

Recent comps in the area have have sold for no more than $90k. The only house that sold for $108K was 3 bedroom; 2 bath; 2 car garage and also had a finished basement. the seller is asking for $78,000. Lowest he says he can accept is $73,000. Repairs (just from what I saw) would be $10k-$15k if there are any foundation issues it would obviously be more than that. Average rents in the area are $795. There are some homes renting for just over $1,000 and other renting for less $795. It doesn't meet the 2% rule or even a 1.5% rule. Based on rehabbing the property and a $90k ARV, I should be purchasing it at $25k - $30k. Nothing here makes me believe it makes a good rental or a good rehab. Is there something else that I am missing to verify my gut feelings here.

Is there something I am missing that would make this deal work?

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