Tommy Dobczyk analyzes a house listing by comparing its $427 per square foot price to recent sales on the same street at $383. With 91 days on market versus a 75-day average, rehab costs of $60 per square foot, and a conservative value around $380k, he says the $35k upside doesn't justify buying it.
Chapters
We use a square foot price to really determine where we're at. And what we can see is that at $427 a square foot, they're a little bit, uh, on the high side for that age of house. And so these are all active listings. This is what they're up against trying to be sold. What actually sold are just these two properties right here, and they're literally on the same street as that one. So all the rest of these are just They're just ideas. They're not actual comps. And you can see over here that $435,000, $383,000. This $383,000 is literally lowest per square foot priced one on here, but it's also a larger home. It's still another 800 square feet larger. Right. And so the rest of these are still— this one is the second lowest one, the $427 a square foot. So for it to really work, it'd need to be closer to the $383,000 and that way it would, it would fit. With what, what is currently being sold in that area at that price. This one being sold at $404,000 from $199,500 is because it's only 3,000 square feet. Okay. So if you could get this one down to $404,000 at 4,000 square feet, then that'd be a good buy. So what I'll do is this right here. I'll tell it because we got market anchor info right here. There's 234 recently sold homes, the median price. About 1.3, and that's with an average of 75 days on the market. This thing's been on the market 91 days. Okay. And so it shows here conservative residential value needs to be about $380,000. So it brings it down to the 1.5 that I originally said. So, and then on the premium side where it's newer condition, we could probably get it to $475,000, meaning that it'd be like 1.9, right? I think the house is— interiorly, it's just gotta be ripped out, gutted, and put back together. And the outside, just update it a little bit. So spending that money on it though, wouldn't— you'd never get it back because if you bought it at $380,000 and then you put, you put $60 a square foot into it, now you're at $440,000. So, and $475,000 is your strong comp, supports at $440,000. So you're only gonna make $35,000, $35 a square foot. Not really worth it. Not worth it. Don't touch it. Right? So then you gotta go another direction.
