As a matter of fact, I say this all the time to just about everyone that brings me a distressed property deal.
Does the house need a new roof? Easy, take an extra $7,500 off the asking price.
What about the HVAC system, does it work? No? Then give me a $4,000 discount.
However, after almost 15 years in the real estate business I still have a difficult time determining the price reduction necessary for a home that sits on a busy street. Industry experts will tell you that it’s around 20-30% off the retail price.
That’s a big range if you’re fixing and flipping houses for a living.
Last week, we sold this single-family home on 19th Avenue north of Camelback Road in Phoenix.
Driveway access to the home is off 19th Avenue, a very busy four-lane road. With that in mind, we purchased the property for $125,000.
Here's a Google Map view of the cross streets:
If this house were inside the subdivision on a quiet street it would comp for $230,000. However, I estimated an after repair value of approximately 20% lower, so we listed it for $189,000.
The rehab was strictly cosmetic, we spent $18,000 on granite countertops, new flooring, appliances, light fixtures, paint and landscaping cleanup.