My first deal, I like the options, hate the squatters

[Eric Turner]

Looking at a 3/2 1600 sqft, $300k SFR. Originally I had wanted to buy this house for my family. The price was right for us. We viewed it and it was trashed. There were a handful of drug addicts (the owner among them) and a couple rooms barricaded shut so I wasn't able to inspect them. The place is in pretty bad cosmetic shape at the very least, but was remodeled in 2008-ish. I assume they are heroin addicts, but there was a strong chemical smell, so I can't rule out meth.  The shop needs at least some securing of the doors and windows. The yard is in surprisingly good shape, aside from the junk.

An offer was made and accepted before we had a chance to discuss it. Yesterday it was put back on the market.

The most similar home sold for $370k COMP. It is nicer and in a nicer area, so I figure I am in the 350k range once all fixed up.

I can't really estimate repairs, because I am not very good at that yet, and I wasn't able to look at half the house and didn't really inspect the part I could access very thoroughly. But it had damage to the walls, and floors, the kitchen was in disarray, I assume the bathrooms will be as well. Needs updating either way.

I figure this could be a decent first purchase for us because we have options. If we want to stay once it is fixed up, we have that option. If we can sell for a profit, that would be fine too.

I am unsure of the best way to finance as well. This would be our first home purchase as we have always happily rented because we didn't stay in one place long.

Thoughts or experiences with these situations? Thanks!

[Andrew Michael]

@Eric Turner I would not purchase this home unless completely vacant and clear of squatters (make sure this term is stated in your contract).  I would also verify its vacancy a week prior to closing and again the morning of.  I am not sure how the laws are in your state but in DC squatters can take over a year to get out. 

 In terms of financing your best bet is probably a private or hard money loan, season it and then refi out.