Hello,A good friend of mine bought a property at a tax sale, its an old abandoned house, he plans to demo it and build a new home to sell.He needs financing of which I am able to cover 80% of.

This should prevent moisture intrusion but is not necessarily up to code.3. demo the pad and install new one and run over budget by a few thousand dollars.Anyone has any thoughts?

I think a lot of investors may believe properties in this price range are basically a demo or in a bad area.

I can also have 1 of my guys do the clean up, demo and other stuff like installing fixtures, siding,fence and landscape for $100/day for 2 month.

Still, I am considering looking at the savings for this approach and the costs of demoing a partially burnt building & cost of property tax over the years for a property nobody wants to buy...?

Plus the flippers before me, boxed in the heater with drywall so a demo will be required of some scale if repairs are ever needed. ( The heater is 4 years old) The neighborhood where it is located is really taking off.

It looks and feels pretty nice, based on the demos I've played with.

I'm thinking of purchasing the property, finding another equal credit tenant as BK or better to lease the building at a slightly higher rate (about 15% under market right now), then having BK pay the fee and ultimately selling the property.It's a great area with solid demos and many other national on the same block, no clue why they couldn't survive.Thanks

As a home, this will have external obsolescence issues being in a commercial area, financing will be difficult and demand will be lower for residential use, thus the lower price.Might look at it as a demo, remove the house and build an appropriate structure or sell the lot, commercial lots can be much more valuable than lower priced homes.

.#3 is only happening if we bought it based on less bedrooms, and included the demo costs.Most likely is #2, but that would be location specific.