Is it a deal?

[Ardie Mansouri]

Hi all, hope you are all doing well!

I'll keep this short and I'll give a quick overview of a lot of the calls I have recently been getting from my direct mail campaign.

-Very motivated Sellers.  Willing to give up the property for as little as just the back taxes owed with a few extra grand to walk away with (for our purposes lets say $5k)

-Property is generally a 3bed 1 bath or 2 bed 1 bath, usually 1 story and around 1000 sf

-Property has sat vacant and has utilities more or less completely stripped... therefore lots of rehab work would be needed (probably $20k minimum rehab costs)  

-Average ARV in the area could generously be placed at $30K

In my mind the only investor that would even be remotely interested in a property like this would be someone looking for a buy and hold, as it seems there is absolutely no room for a fix and flip margin.  My question to all of you is, are my thoughts on this correct or not?  

I suppose I could get the property under contract with a financing contingency, and shop it around to see if there is any local investor interest.  Any thoughts on this?!  Thanks in advance for any input!

[Chaz Reid]

I'm guessing that you have no clue how much the rehab would cost since you guessed. My suggestion is to get the properties under contract and have a GC give you a more accurate estimate for the repairs, then run your numbers. Be upfront with the seller and tell them you will try, but depending on the numbers you might not be able to help. If they ARV is 30k, repairs 20k, 5k for the seller, that only leaves 5k of room for your profit and zero room for the investor. 30k ARV is probably in a war zone or something, so that means less rent. Give it a shot but don't put too much money or time into marketing, unless the repairs are cheaper than you've estimated.