Deal Advise

[Justin S.]

I'm a newbie and need advice on a deal.

Exit Strategy: Wholesale
House Details-
Year Built 1979
Sq. Ft = 1829
3 Bed/2Bath
Property is in a rental neighborhood. House has a tenant paying $1000/month but the homeowner is being foreclosed on. House has a converted garage into a living space so that accounts for 400-500 of the square footage. Other properties in the neighborhood are between 1000-1200 square feet. Tenants know the property is being foreclosed on and would like to stay if possible. Hoouse could use some fixup, but its mostly cosmetic.

My purchase price would be $121,000 ($66/ft^2). My wholesale price would be $128,000 ($69/ft^2). Taxes are $1064. No HOA.

BPO came in at $140,000 and but bank said they need to net $121,000. Houses forecloses in early April.

Three other houses for sale on the block (all around 1100 sq.ft) are at $83/ft^2 (average). Lowest is $73/ft^2.

Last two houses that sold averaged $115/ft^2 which is hard for me to jusify for the FMV of the subject property. All other comps are banks buying property back at auction.

The extra square footage based on converted garage, I think, inflate the value of the property which makes me nervous about doing the deal.

What does everyone think?