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Under Budget House that needs updates vs. Max budget House

Just lost out on a super nice small updated house 3BR, 2BA 1250 sq ft. 1985 build with pool and solar that was near our max budget ($650K) as our best offer got beat at last minute. We really like this neighborhood/area.

In this same neighborhood, our agent has helped me spot 2 listings that are about to hit the market and currently on MLS with no inside pics:

  1. 3BR, 3BA 1450 sq ft. 1985 build 669K list price. Looks great on outside with updates, newer roof, updated kitchen, new floors, new lighting etc, comes with big finished yard 8K+ sq ft with RV parking. Bathrooms may need some updating. Gonna be listed at 669K but comps have it lower near 650-660K and may be attainable under listing price.
  2. 5BR, 2,5BA 1720 sq. ft. 1964 build 599K list price. 7K+ sq unfinished yard. New roof, new AC. Outside looks clean but very basic and dated. Possibly original owners as no sale history. Comps are in 650-700K range with some updates. Listing mentions needs updates and I am expecting to need kitchen/bathroom updates as well as flooring, paint.

Would it be worth it to consider House #2 and immediately pour in $40K or so to update? I have enough liquid savings ($170K) to do so but probably wouldn't want to go over 40K as I need to spend $70K or so in total down payment/closing costs for a $600K house with 10% down. Would be left with $50-60K emergency savings.

I would be paying for labor. I see the longterm potential of the bigger cheaper house but I am trying to figure out how much money I would need to spend to update and if worth the stress. My agent is going to check both out this week and take picture for me to have a better determination.

Thanks for any input!

submitted by /u/Thrice91321
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source https://www.reddit.com/r/RealEstate/comments/hzs3b6/under_budget_house_that_needs_updates_vs_max/
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