A REO For $6k, What Would You Do W/ This Deal?
I inspected a house two months ago that the bank wanted $11,900. I offered $4700 and they declined. My agent had me wait 2 months then to offer $6k. They may accept it. It's a 2/1 in Indiana, about 1400 sq ft including the unfinished basement. Visually I saw it needs the following:
-kitchen floor boards, they are warped from water
-paint and carpet throughout
-updated kitchen & bathroom
-removal of tree in back, it has grown onto the back of the house so I'm sure the roots are under
-exterior paint/ etc for curb appeal
It's a small house directly across from a park for kids, great for a starter home or rental. My Mom bought a house last year on the same block for $34k but it was larger and much better shape a 3/1.
What would you do?
Buy every $6,000 house I could find and rent them out.
Well there is the problem of how you are going to manage an IN house from CA.
Where in IN? Depending on location, it should cash flow nicely as a rental. Any idea what fair rent is in the area?
Also beware of the floor board issue - it may extend to the joists underneath. I'm working on one right now that has that issue.
[addsig]
It is all about cash flow, once you have figured out your expenses what will your cash flow be?
Generall I agree with the Rehabinator, a 6K house is hard to come by. IF you were 20K into it and renting for $400 a month you would be money ahead.
I just worked this out on my handheld but with $250 a year fire insurance and $400 in taxes and 7% interest the payment over 30 years is $173 a month.
Do the math
[addsig]
Quote:
On 2004-06-16 13:19, jblackwell wrote:
Where in IN? Depending on location, it should cash flow nicely as a rental. Any idea what fair rent is in the area?
Also beware of the floor board issue - it may extend to the joists underneath. I'm working on one right now that has that issue.
It's in Indianapolis. The house it down the street from my mother's. I have two rental there now. How much is the joist repair/rebuild running you? I did take that into consideration cause anything could happen. I could get at least $395 if I would rent it out.
The jury is still out on the joist redo job. Also have some sill plate issues. I'll know more within the next few days. Contractor looking at it tomorrow. At that point I'll decide whether to pay or do it myself. It sounds like you've got a pretty good deal going. I'd run the numbers, as stockpro said, but it looks reasonable.
Best of Luck,
Jeff