Foreclosure with equity

[Alex Rearmice]

How would y'all rate this deal? I found a foreclosure on a 2/2 1 car garage about 900 s.f. with comps in the nbhd. all at $104k to $109k. It was first at $93k, then just reduced to $80k. I offered $64k, but there was multiple offers, so now I'm submitting $75k and hoping to get it right about there.

It will need carpet and paint - $4k. Fridge, $200 scratch and dent. A few minor repairs, $200. Garage door straightened, $100. Add another $1k for unknowns, but the furnace, water heater and HVAC all looked fine and seemed to work ok. All in looking at $75k + $5,500 = $81.5k, leaving $22.5k equity up front. I am looking to do all cash as part of a 1031 exch. and then selling it after 1 year renting (and up to 2 years).

The "bad" part is there is a mandatory $75/mo for lawn care and snow removal, and there is a $208/yr HOA fee. So that's $1,100 per year. I will naturally either build this into the rent or, if possible, pass it along as a cost (and benefit) to the renter. Taxes are at like 2%, which sucks, but that's the way it is.

The good thing is, it has a brand new roof.

After selling and paying comm., I'd net about min $20k after it's all said and done.

OK deal? I'd turn around and 1031 that $$$ into something else in 1-2 years time.