Can a $29,000 Home be overpriced?

I wandered out to look at some investment properties this afternoon…  One of the properties was priced at $29,000… in a neighborhood of $100,000+ homes.  In fact, this very home had sold for over $110,000 in the last couple of years.

Could it be overpriced at $29,000?

Yep.

The funny thing is that the wholesaler says it needs like $12,000 in repairs…   Maybe if you pick up all of your materials from the curb after they are tossed out of nice homes…  I would put the budget at closer to $40,000.  and that is assuming that the mechanicals and structure are ok, and that isn’t a safe assumption.

Here is a list:

• Gutters
• Roof repairs
• Front door and casing
• Enough of the siding to make it worth replacing all of it
• Ditto for the windows
• All of the flooring.  That which is still there is nasty
• And every wall and ceiling needs paint
• Rebuild the rear deck
• About 20 sheets of drywall
• All of the appliances
• EVERYTHING in the kitchen… like the cabinets and counters
• Landscaping
• Un-convert the garage from its bonus room conversion

I would peg the property at a value more in line with $15,000.  An investor will need to realize a healthy profit AND have enough room for hidden defects.

• Mold abatement
• HVAC replacement
• Structural repairs
• Foundation repairs

I’m not saying that those are probabilities…  just that they are possible.

An end-use buyer would face similar issues,  AND they will need to be able to finance it without FHA support, since it probably wouldn’t qualify.  It also would have trouble with many renovation programs… so cash might be in order for renovations.

But for the right buyer it could be a great deal.

I did run across another property that looks like a much better deal…

Don’t hesitate to shoot Lane a message if you have any questions, or need any help. And check out the new links for FREE Property Searching, FREE Comparative Market Analysis and FREE Market Reports. They are near the top of the page…