Lake Butler 3/2 Built in 2007 for $65K - Should I Buy?

[Jarred Mussen]

Hey BP community! I am under contract for a HUD home located in Lake Butler, FL to make it a rental property or a flip. I am new to investing and wanted to find out if other investors would take the risk with the unknowns listed on the seller inspection report pasted below (especially the plumbing situation below since I am unable to get the water turned on) or if it isn't worth it/it's too risky? Purchase Price: $65k Known Fix Up Costs: About $12k of known cosmetic updating. Unknown: Plumbing unknown and electrical wiring currently unknown but could get electricity turned on to find out. ARV: $110k Rental Income: $975 Estimated Monthly Expenses: Debt Service: $274 Taxes: $174 Maint/repairs/CapEx: $165 Vacancy: $110 Insurance: $32 Property Management: $110 Total Cost: $865 per month Monthly Cash Flow: $110 I pasted the inspection report from HUD below. I am not able to get the water turned on for my own inspection so I was wanting to see if other investors would Plumbing: "water lines tested and would not hold pressure, the main line from the tank is malfunctioning and allow air to escape." HOC: Atlanta Property Condition Report Item Description/Condition Item Functionality Functionality/Test Notes _____________________________________________________________________________________________________________________ Cooling/Air-Conditioner: Damaged --Heating/Furnace: Damaged HVAC tested and functional?: --HVAC System Duct: OK _____________________________________ Yes generator by-pass - several rooms would not energize, possibly due to faulty GFI's, the AC would not turn on a visual inspection of all components was conducted and unit appears in good condition. Recommend electrician test the unit same as above duct appears intact _____________________ _____________________________________ generator by-pass home energized the master bedroom and bedroom 3 have GFI breakers in the panel box that would not reset there for the power in those rooms did not work, the GFI in the kitchen and the bathroom would also not reset causing the power to the surrounding outlets not to work Electrical Wiring: Damaged --Other: N/A --Other: N/A _____________________ Electric supply tested and functional?: __________________________________________________________ Yes ____________________ _____________________________________ over is operational there is smoke damage and rust on the stove cabinets are present and intact _____________________________________ Stove/Range/Oven: Damaged --Kitchen Cabinets: OK --Other: N/A Built-in appliances tested and functional?: __________________________________________________________ Plumbing: OK --Sink: N/A --Other: N/A Water supply tested and functional?: Water Heater: OK Yes ____________________ water lines tested and would not hold pressure, the main line from the tank is malfunctioning and allow air to escape. __________________________________________________________ Yes ____________________ _____________________________________ water heater was inspected for rust and visible defects and it appears new _____________________________________ Water heater functional?: _____________________________________ Yes ____________________ Sewer/Septic System: OK --Toilet: N/A --Other: N/A _____________________ Sanitary & plumbing system functional?: __________________________________________________________ Yes ____________________ visual inspection of components conducted with no notable defects no water was introduced due to intact winterization _____________________________________ several shingles were missing or out of place on the roof, no water stains inside nor in the attic Roof: Damaged --Other: N/A Roofing in acceptable condition?: Yes _ __ __ __ __ __ Thanks for any advice provided! Sincerely, Jarred