I have the opportunity to by a house that is pre forclosure for 100,000 below appraised value. Should I buy it

Question

My husband and I own approx. 1.4 million in real estate investments. We had decided not to buy anything else; however, we now have the opportunity to purchase a single family home that is under preforclosure. The house is appraised at $456,000. It is being sold for $355,000. Should I buy it?

Answer 1

I am laughing at the previous answers......lol. I assume you are going to try and flip this house?? If you where going to rent it out or live in it yourself, thats another answer. You are a experienced investor, and I like to think of myself as the same. To most this seems like a great deal. 100K PROFIT!!!!! I myself would say NO DEAL!! Now alot depends on unknown varables to me such as: sq ft, location city, etc etc. The reason I say no is my #1 rule of flipping is that the property needs to be 70% of true value, or in this case we will say appraised value. 70% of $456k is $317K...............$38000.00 SHORT!!! There are to many great deals out there, so pass on this one. Good Luck

Answer 2

Well its seems like a no brain-er for someone who is bragging they own 1.4 million in real estate. Which by the way doesn't impress me, That's like 2 homes where i live. Anyway, if the appraisal is legit, why would you pass up on making 100k, and why are you asking advice from people here?

Answer 3

Dano N's right on target! If you can't buy it AND repair it for 70% of ARV (after repaired value) it's not a good enough deal. If you are in a declining market, I'd have to buy it even cheaper than that!

HTH

Answer 4

First be sure the appraisle is real and that is what the house is really worth. If it is go ahead and buy it and flip the unit.

Answer 5

U know that is a good deal that is how u made that much money in real state already. Buy it i would.