My first BRRRRR deal in Blue Springs, MO - Need you inputs

[Murali Jesudoss]

Hello BPers,

After 4 deals with no rehab required, I finally have one BRRRRR deal under contract in Blue Springs, (Kansas city, MO). As you might know this is a super hot area with deals going close to 200K or above in good B+ neighborhood. The home is 3B 1.5B 2G ranch (with one more bath in basement that might be gone during rehab) with foundation(2 bowing walls)/mold/wet issues in the basement. Price is $120K and foundation/mold requires solid 20K with flooring, painting, bathroom remodel and other cosmetic upgrades require another 20K(have bids from vendors). So 40K + 120K overall and may be 3-5K more for any pluming or electrical issues or fixes. I saw one home with one 1 garage(similar spec) and 1.5Bath after rehab went for $180K in the same street in April. I was estimating 190K lower end and 200K high end ARV (as MLS listing comps may be no longer relevant for market ARVs, as they are all inflated and hard to compare now, as the price goes up on daily basis).

My realtor is nervous that this deal may not be as good as we thought(which I agree, as this might be just an OK deal), but I believed that it's worth the risk, as the area is B+ and rental opportunities are easily 1450-1600. We might easily have $20-30K equity provided that we address all core issues properly within budget.

I would love to hear from the BRRRR experts, if I am making the right decision or should I reconsider since the issues are in foundation and the numbers may not hit the sweet 70% rule?

Thanks!