How much would you pay for this house?

[Jon Klaus]

4-2 across the street from the lake an hour east of Dallas. @1800SF built in 1980. Some updating already complete. Needs about $7K in repairs (mostly new flooring). Possibly add another $3K for a marginal roof that may have a few more years left.

Comps are tough. The waterfront homes across the street would go from $150K-$300K. Off the water, they are everywhere from $25K to $100K. The farther from the water, the lower. Tax appraisal is $83K I think ARV is around $70K?, but could be $60K or $88K. The neighborhood is really lower end , except the waterfront which are really higher.

This one should rent for $750-825/mo. I’d most likely keep it long term or lease/option, but this is different that what I’ve been buying, so I’d be open to flipping or contract for deed or….

What would you pay?

[Jon Holdman]

What concerns me is your big range of comps. If you're sure $70K is a good number, then this seems like an excellent deal. At $29K plus $10K you're at $39K or 56% of value.

However, with a private money/refi strategy, I get $26,500 as my max price. I'm assuming 10% and no points and six months until you can refi. I'm also assuming $1000 in closing costs on the purchase and $2000 in costs to do the refi.

Here's my math:

Rent: $750
Expenses: $375 (50%)
NOI: $375
Cash flow: $100
Max payment $275
Max perm loan: $41,334
Refi costs: $2000
Max amount to be refinanced: $39,334
Total money costs: 5%
Max private loan: $37,461
Purchase costs: $1,000
Rehab costs: $10,000
Max purchase price: $26,461

I really hate funky floor plans. People do notice. Some people (ok, most) really just need to stay out of Home Depot. How bad is this?

Any way to go have a look inside some of the other listings in the area?

I just took a closer look at your avatar. What is that picture in the background?