This is one of those deals that makes sense from either angle - whether you're looking to build long-term cash flow or capitalize on a quick flip.
As a rental, comparable properties in the area support approximately $700/month in market rent for a home of this size (there are many at $750-$850. This is just a conservative number). After accounting for estimated taxes, insurance, and property management, the property is projected to generate around $6,700 per year in cash flow. Based on the purchase price and estimated renovation costs, that equates to roughly a 15% annual cash-on-cash return, making this an attractive, low-cost addition to any rental portfolio.
Bear in mind, when it comes to achieving this rental price, it would likely rent lower ($600-$700/mo), if kept as a 1 bedroom. To achieve the higher rents, many of those comps are for 2 bedroom properties, so utilizing the existing space and adding another bedroom, or doing a small addition to accomplish this, would be helpful if that's the end goal.
As a flip, comparable sales support an ARV of approximately $60,000. Factoring in the acquisition price, renovation costs, including converting the existing usable space into a second bedroom, and all anticipated project costs, the total investment is projected to remain under $40,000. That leaves room for an estimated $20,000+ gross profit before selling expenses.
Whether you choose to hold or flip, the fundamentals are what make this opportunity stand out: a low entry price, a manageable renovation, multiple viable exit strategies, and strong upside relative to the total investment.
Important To Note: The figures above are based on our analysis of local comparable sales and rental data. As always, buyers should perform their own due diligence to verify all estimates, projections, and assumptions before purchasing.
