1800's Pennsylvania Home...Rebuild or Demo and Build New?

[Jose Gandulla]

Hello BP,

During one of my direct mail campaigns( I am a wholesaler) I came across a property that I need some serious advice on. Normally I'm ok ( def not an expert) on determining repair costs and ARV but this one has got me stumped for several reasons; Asking price, Comps, whether to do a complete makeover of the home or demo the house and build a new one.

Property in Question:

Built 1860

6bd 3.5 bath

2836 sft

sits on 3.38 acres of land

property concerns:

Needs MAJOR upgrades: heating system, plumbing, electrical,roof,windows, walls,flooring, sunken floors in some rooms,major paint, appliances, kitchen needs full remodel, all baths need full remodel.

Positives: House is structurally sound ( would recommend further investigation on this)

the area is a very affluent rural area and property does have potential if done right.

Comp #1

Sold 4/28/16 for 389,000

Built 1980

5bd 4ba 

2753sft

Comp #2

Sold 2/26/16 for 366,900

Built 1955

4bd 2.5 bath

2500sft

ARV of property 375,000 (average of the two homes that were less than 1/2 mile from property in question)

These are the best comps I can come up with. Other homes in the area either had too few rooms, not enough square footage, too far away, and not within the past 6 months. The house is currently under contract with a Real Estate agent who would be more than willing to split the commission with me. The house has been on the market for almost a year and the seller does not intend to renew.

His asking price 275-280k

His reason for selling?

Has had several bad experiences with tenants. Has had several low ball offers around 250k.The house is divided among four owners and all are in agreeement that they want to sell the property.

My Question:

Is there more potential in a complete demo and build a new home similar to the ones in the area and have the extra land as a value add, or can this home be saved and if so, is the 275k a good price for both scenarios. I am unfamiliar with the costs of a new build which is why I'm reaching out. All comments, questions, criticisms are greatly appreciated. I have pictures of the property for those who are expressing serious interest. Thanks again.