Thoughts on this deal?

[James Vermillion]

Hey everyone,

I am looking at a deal that involves a house built in the 1950s. It has 4 bedrooms, 2 bathrooms. It has been vacant and on the market for over a year, priced at $125K which includes an empty corner lot next to it. I think I can get the propery for $80-90K. I plan to first rehab the existing house (needs $20-25K worth of work). I then want to build on the corner lot. Does anyone have any thoughts on how a new house will sell in an older neighborhood? I planned on building to somewhat match the looks of the existing homes.

Also, I know very little about new home construction. I planned on building for about $100K? Can this get me a 3br 2ba home w/ about 1500 sq ft? I know it depends on the area but any feedback would help. I hope to sell the new house for about $140K.

Thanks in advance,

James

[Shaun Steckler]

Without knowing more about the neighborhood, I would say your maximum allowable offer on the house should be $62,500. Start here and don't go above $75K.

I'm assuming the ARV on the house is at least $200,000.

With regard to building a house for the first time, I would be very careful. If you don't have the experience, find somebody else who does.

Good luck.