Gold Mine or Land Mine?

[Amanda Wilson]

Hoping to consult the wisdom of the BP community - looking at the following deal as a first BRRRR property. Thoughts?

2-bedroom, 1-bath, 930 square foot single family home in a small tourist town in northern WI, listed for $48,000 and assessed at $32,000, estimated FMV of $34,000. On the market almost 3 months with a 13% list price reduction on 9/1/2020. It sounds like there was a potential buyer in late September who was unable to obtain traditional financing due to home condition. Targeting a $30,000 cash price and $30,000-40,000 in rehab costs to convert to a 3-bedroom, 2-bath. We can buy the house with cash, do the rehab with cash, with the BRRRR goal of getting 100% of our money out when we have the rehabbed property appraised for traditional financing. Local rents are $600-800/month for 2-bedroom, 1-bath homes and $800-1,000/month for 3-bedroom, 2-bath homes. Comparable 3-bedroom, 2-bath homes have recently sold for between $85,000-$112,000, so I feel good about the numbers and potential cash flow IF we can hit our rehab budget.

Here are the rehab projects we have identified:

*Update heating/cooling system so home qualifies for traditional financing (gas heater pictured below is only heat source in home)
*New siding
*Finish attic space into 3rd bedroom to increase square footage and rent potential
*Add small 3/4 bath upstairs (in the purple
*Finish the kitchen
*Finish installing matching LVP throughout house

Questions:  Why hasn't another cash buyer snapped this up yet?  Am I crazy to think we could complete the above projects for $30,000-40,000 in a small home if we do a good amount of the work ourselves?  We are handy and ready to tackle a big project!  Are there other rehab concerns I haven't considered that stick out to the seasoned pros out there?  Thanks in advance for your thoughts!

[Aaron K.]

The problem is it is tough to squeeze reasonable 3 bed 2 bath into 900 sqft and if you are adding on that is likely much more than $30k-$40k