Realtor Says DEAL.....I Say NO DEAL.....What do you say?

[Austin Faux]

Hi everyone,

So I've got a Denver realtor trying to say this property: http://yourcastle.org/property/denver_7377641--459... is a deal.  It's a total scrape and no one can live in it according to the two attorneys trying to sell the place. (Buyer Beware).

If we completely tear down the place and rebuild at $150sqft to get it near the $320,000 comps (1,400sqft) it would cost almost $210,000 ($150sqft x 1,400) just to rebuild the place.

My Numbers: 

$320,000 ARV (Max)

$160,000 Buy

$30,000 Scrape

$210,000 Build

$30,000 Profit

= -$110,000 or in otherwords.....No Deal

The realtor says "I am seeing an end products of $500K or more to be worth a scrape - otherwise additions or simple rehab the numbers will not work…"  The realtor is also saying that I should pay their asking price of $160,000

When I look at comps I only see the neighborhood selling at a range of $207,000 - $370,000.....nothing close to the $500,000 mark.  Granted a few blocks down is Cherry Hills and properties are selling in the Millions.....BUT this isn't Cherry Hills.

The only way I can see this being a deal is if I were to buy the place at $50,000 mao.  That's what I offered and the realtor's response was "this deal is too big for you."

What do you guys think?

[Russell Brazil]

@Austin Faux Realtors are incentived to close a deal whether it is good or bad. I actually think one of the most valuable things you can have in the real estate business is a Realtor who is honest enough to tell you to walk away from a deal. 

@Matt M. brings up a good point about the broker remarks.  I typically steer clear of properties that have to have multiple people signing off on. It is always a nightmare dealing with estates and the such.