Need help analyzing deal

[Michael Petruziello]

Hey BP-

I found this deal that I need help analyzing because to me, it sounds to good to be true. 

A landlord responded to one of my absentee mailings and he wants to get out of his SFR rental because he is tired of being a landlord.

The property was previously rented out for 4 years (same tenant) at $800/month and based on rent comps within the neighborhood, the median rent is $800/month. The neighborhood is lower income and most other properties on the street are owner occupied with no vacancies. 

Summary of the Property Details:

Type: SFR
SQFT: 1504
Rooms: 7
Beds: 4 (5 with attic)
Baths: 2.5
Other: Two car garage, semi-finished basement
2015 Taxes: $1,044.66

The property needs updating. My partner (contractor) walked through it, and to bring it up to date he said it would be about $10K. 

My thought is to offer this deal to another investor that would like to add to their rental portfolio. I do not have any rentals, nor do I plan on having them. 

The owner is asking $30K for the property but the comps have been all over the place within the last few months ranging from $16/sqft - $46/sqft. The majority of the active listings for the neighborhood are around $30-$45/sqft.

Based off my analysis, if an investor purchased the property from me at $61.4k ($50K purchase price plus $10k repairs plus $1,400 cost of purchase ), the investor would have around $500 positive cash flow per month.

Another experienced real estate investor told me that we need to present both options; flip and buy/hold. But this is obviously not a flip opportunity. 

My question is.. What am I missing here? Would an investor not want the property because he/she wouldn't make money on the ARV?

Please let me know if you need more information. Your help is greatly appreciated. 

Thanks,

Michael 

[Matt Stewart]

I'd still want to know what the ARV is, even if I was a buy and hold guy. You say the comps are all over the place, which is common in lower income areas. But you've only done half the work. Analyze the comps, look at photos, determine which comps will compare with the quality of the property once you've put your $10k into it. Do that and you'll come up with a solid value.