first rehab, landlocked house with easement, BRRR

[Tim Dailey]

Hi All,

Finally found a deal in my farm area that fits numbers for buy, rehab, rent, refinance.  The market has been tough to locate deals.  I was hoping for a second (third fourth etc) set of eyes and ears to bounce it off.  

I have been working tax lists, driving for dollars, realtors, door knocking, auctions. The deal came through MLS and has been on and off over the past 5 years, recently foreclosed and is listed at 73k. It was listed 5 years ago at 239 and has seen price reduction after price reduction since then.

ARV is 170-200.

City is seeing tremendous investor interest and population growth.  House sits on dead end street in decent neighborhood.  Neighborhood is slightly weird due to older families and additional roomers in properties. Several properties on neighboring streets have seen homeowners add large additions.  I can throw a baseball into the yard of a house on the corner that sold for over 500k (bigger and nice).

The property:

SFR 1200 sf 3/1 with a weird layout (will be rectified in rehab)

preliminary scope looks like 50k-65k

sits on a landlocked parcel with a right of way and shared driveway across neighboring driveway.  Deed states "to have and to hold the same unto the said grantee and grantee's assigns and successors forever."  Should I be concerned about issues with subordinate property?

There is an oil tank in the basement that looks like it may have had a slight leak in the past.  I have an environmental remediation company coming to check it out.

once rehab is complete it should rent for 1400-1600

Brief synopsis of rehab: partial roof (maybe more, there's a sag), sheetrock over existing paneling and paint.  remove carpet and refinish sub floor, replace countertops, add kitchen appliances, move a wall to make space for a proper staircase, add a parking spot, replace oil tank if it isn't already a deal killer.

Exit: hold as rental long term, sell on a lease option

Any thoughts would be much appreciated.

Thanks