Fixer upper in desirable neighborhood

[Kelly Jones]

Hello!

I'm an avid reader on the forums, but this is my first foray into starting a discussion.

Curious what you all would recommend in this situation:

I am under contract to purchase a SFR located in the South Puget Sound (WA) in a strong, desirable neighborhood for $302k.

4 bed/1 bath, 1600 sq ft, built in the early '20s. The plan is to rent our current home and move into this property as our primary residence.

The house needs a considerable amount of work- including a new bathroom, kitchen, windows, lacking a furnace, plumbing and electrical repairs. My husband and I are able to do quite a bit of the work ourselves; estimated cost of repairs will run $20k-$30k. The home's after-repair value is around $400k. A large majority of it's value is based on its location in this 1-mile radius neighborhood.

In contrast, there are several homes for sale right outside this neighborhood that are comparable in price (~$300k) but are move-in ready. We're struggling deciding whether to proceed with the purchase due to the intense amount of initial time and capital needed upfront.

This would be our largest project to date, and would be a stretch financially. However the estimated payoff appears promising. Thoughts?

Thanks for any feedback!