All Forum Posts by: Barrington Smith

If it’s been on the market for 118 days , it’s not a deal . 

Hi Barrington, its hard to tell without any other deatils, would you like to share some more information about the property?

Ok you offered $300K and the ARV is a bit over $400K . That could be a deal in my book . First is the house in relativly good shape , but just dated . If so , you buy it , clean the living hell out of it . Fix anything thats broke , give it a fresh coat of paint and rent it out . It doesnt have to be "up dated " to be rented . Just clean , neat , and everything works . There is a shortage of decent rentals .

Now you rent it for 3 to 7 years .  After that , values may have increased , you have built up some funds , and if its necessary at that point , you give it a rehab . In the mean time you have made money . 

I have a tenant been in a house 26 years , I lived in it the prior 10 years . It was dated when I bought it , and it still is today , ( even more dated )  . When they decide to move I will then see what I have to do , I may do a full remodel , I may just need to clean and paint . But that house has paid for itself 3 times over and its worth 8 times what I paid for it . 

What Christian said ^^. This property is not worth 300 to you as someone who is going to pay to renovate it under this scenario. 

With the numbers you shared, and the common 75% of ARV calculation you would be heavily underwater if you buy this house at 300,000.

75% of ARV is the max you want to go when you include all your costs.

Purchase price + reno costs + holding costs < 75% of ARV. So in your example your acquisition price couldn't be over $166k.

@Barrington Smith I'm busy with a 1965 full house remodel in VA. You should have the sewer line checked as cast iron will probably be toast by now. Also electrical system/panel/wiring may be seriously outdated. These older properties as not just cosmetics and may need major surgery.