Recently, a friend of mine asked me a real estate question about a foreclosed house he’s interested in flipping. I love taking people’s questions, but also want to share that information with all of you! So here is his question:
Question: Had a couple Q’s on buying foreclosed. I got a chance to buy one for back tax price which is about $4000. Needs some updating and a garage cleared out, a tree fell on it and destroyed it. But it has asbestos wrapped pipes all through the basement.
Has new roof, nice hard wood floors, nice wood work inside and good foundation. 4 bedroom 1.5 bath. It looks like something to make a good profit on but that asbestos in basement is what got me double thinking it. Thanks….
Another question I have is what kind of percentage of profit margin do you recommend to actually invest into a property? This house is foreclosed for about $4000 in back taxes and would need some updating but still has a good profit to make. The only thing I didn’t like was the cost of asbestos removal.
Here’s what I have for you: You first need to find out what the city or county municipalities govern asbestos mitigation. I’m not sure on the particular laws in your area, so you will have to do some research on that.
Then just find out what they require for asbestos mitigation! If a pipe bursts or breaks what kind of expert do they have to bring in? The most important thing I think is to find out if you can leave the pipes as is for now, or if you have to deal with it immediately
I would recommend taking the time to find a proper asbestos expert to fix this all up. The asbestos in itself isn’t a reason to move past, it just depends if they are going to give you the proper time to get an asbestos team together. I always recommend finding a team of experts before acting.
Now the target profit depends on if you are flipping or renting. But in your case (flipping), you want to shoot for 20%. I always say a minimum of $20,000 per $100,000 investment. I hope that helps.
Please feel free to always leave questions in the comment section below–or message me privately if you prefer! I hope to be a true help to my readers.
Do you have experience with foreclosed housing? Please share your stories and wisdom in the comment section!
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