Is this a Deal or No Deal?

[Jose Flores]

Hello Everyone

I just found a single family house for $25,000. The owners is willing to hold for 5 years with 5000 down. Here are the numbers:

ARV is: 55,000
Repairs: 16,000
Do I still try and flip this house or do a as is lease option with 10,000 down? Any thoughts would be appreciated.

Thanks

Jose

[Will Barnard]

So acquisition plus repairs makes this all in for $41k with only a $55k exit value ($14k gross spread). You then have holding costs, acquisition costs, financing costs, and resale costs. You would end up with little to nothing.

That does not mean you walk away. It just does not pencil for a quick flip.
What is the rent rate for this home? With $5k down and owner financing, if your rent is better than all your costs thus producing cash flow, buy it, ride out what could be a few years of appreciation then dump, or keep as a long term hold.