How To Know When You're Forcing A Deal

[Matt Lowery]

I'm curious if anyone has developed any controls for when they might be forcing a deal that they shouldn't. I know the calculators and info is all here to make safe decisions, but there are also personal goals and situations that have to be taken into account.

I've found a property that is FSBO 4 doors from my front porch. It has been a rental for a long time and an older home built in 1920. Which is appropriate for my neighborhood, my experience working on property and my primary interest in rehabbing.

Numbers are:

4 bed - 2 bath with 2 car garage 1,780 sq/ft

ARV: $80,000

Asking Price: $20,000

Foundation work: $15,000

Roof/Soffets: $15,000

Interior Remodel: $10,000 (with me as the hammer swinger)

Carrying/resale costs: $4,500

With a net profit of $15,000, that's actually 40% of the median household income in my county. So, it's not something to ignore. As a single parent raising two grade school children, the idea of a home so close to ours is incredibly attractive. But, I'm concerned about that much work, which means that much risk and money I need to find, may be being clouded by the idea of convenience.

So, my question is: Does anyone here have benchmarks or flags when they say, "I'm to going to much on emotion and making to many trade offs."?