Located along the forested hills of Jackson County in Eastern Kentucky, 2704 Highway 2004, McKee, KY 40447 presents a rare entry point for rural land buyers, fix-and-flip real estate investors, and homesteaders. Priced at $89,900, this property includes a 967-square-foot brick ranch home situated on 25.00 acres of mostly wooded land.
Offered at $92.97 per square foot for the home—or effectively $3,596.00 per acre if evaluating the transaction strictly as a land acquisition—this asset reflects a 38.0% discount ($55,100 drop) compared to its last documented arm’s-length sale price of $145,000 in August 2023. Listed as a Bank-Owned REO (Real Estate Owned) foreclosure, the listing also qualifies for VA Vendee Seller Financing, allowing both veteran and non-veteran buyers to purchase with low down payment requirements.
This real estate market analysis provides a complete examination of 2704 Highway 2004, evaluating its financial metrics, physical interior condition, rehabilitation budget requirements, regional land value, and investor return profiles.
Property Overview and Detailed Specifications
Evaluating official listing disclosures, public county tax records, and historic transaction data provides the physical baseline for this McKee, Kentucky listing.
| Property Parameter | Listing Disclosures & Public Records |
|---|---|
| Street Address | 2704 Highway 2004, McKee, KY 40447 |
| County / Region | Jackson County / Eastern Kentucky (Appalachian Foothills) |
| Parcel Identification Number | 20-44 (Parcel #2043) |
| Current Asking Price | $89,900 (Listed August 26, 2026) |
| Last Sale Price (August 2023) | $145,000 |
| Net Price Discount | -$55,100 (-38.00% drop from 2023 sale price) |
| Finished Above-Grade Living Area | 967 Square Feet |
| Listing Price Per Building Sq. Ft. | $92.97 per sq. ft. |
| Total Surveyed / Estimated Land Area | 25.00 Acres (1,089,000 Square Feet) |
| Effective Price Per Acre | $3,596.00 per acre (unadjusted) |
| Bedrooms / Bathrooms | 3 Bedrooms / 1 Full Bathroom |
| Architectural Style & Foundation | 1-Story Ranch / Concrete Block Foundation |
| Exterior Envelope / Roof | Brick Veneer & Vinyl Siding / Metal Roof |
| Heating & Cooling Infrastructure | Electric Heat Pump / Forced Air Heating |
| Water Supply & Sewer Utility | Jackson County Public Water Connected / Private Septic Tank |
| Special Financing Eligibility | VA Vendee™ Seller Financing Eligible |
| Annual Property Taxes (Historical) | ~$8.00–$28.00 per year (Agricultural Assessment Basis) |
| Homeowners Association (HOA) | None ($0.00 / month) |
Financial Valuation & Repricing Trajectory Analysis
Evaluating the financial trajectory of 2704 Highway 2004 requires tracking its multi-year listing history and breaking down its residual asset allocation.
Historical Price Trajectory & Foreclosure Discount
Public property records document a volatile price trajectory across the 2022–2026 market cycles:
| Transaction Date | Listing Event / Market Status | List / Sale Price | Price / Sq. Ft. | Net Price Change |
|---|---|---|---|---|
| September 20, 2022 | Initial Market Launch | $190,000 | $196.48 / sq. ft. | Baseline List Price |
| February 19, 2023 | Price Adjustment | $174,900 | $180.87 / sq. ft. | -$15,100 (-7.95%) |
| May 1, 2023 | Relisted for Sale | $159,900 | $165.36 / sq. ft. | -$15,000 (-8.58%) |
| August 4, 2023 | Closed Arm’s-Length Sale | $145,000 | $149.95 / sq. ft. | Sold (-9.38% from list) |
| August 26, 2026 | Bank REO Relisting | $89,900 | $92.97 / sq. ft. | -$55,100 (-38.00%) |
In August 2023, the property was purchased for $145,000 backed by a VA-guaranteed mortgage of $148,117. Following a default and subsequent foreclosure, the Department of Veterans Affairs reclaimed the asset and placed it back on the market at $89,900. This 38.0% price cut reflects the lender’s objective to liquidate REO inventory quickly, transferring equity upside to cash buyers or investors willing to address the home’s deferred maintenance.
Residual Asset Allocation: Land Basis vs. Building Shell
To determine whether $89,900 represents genuine value, investors must separate the underlying land value from the physical house structure:
- Regional Raw Land Value Basis: Unimproved 20- to 30-acre timber tracts in Jackson County typically trade between $2,000 and $2,800 per acre depending on road frontage and topography.
- Conserving Land Valuation (25 Acres at $2,200/acre): $25.00 acres × $2,200/acre = $55,000 land allocation.
- Implied House Structure Residual Basis: $89,900 total price – $55,000 land value = $34,900 remaining for the house.
- Implied Square Foot Cost of Structure: $34,900 ÷ 967 sq. ft. = $36.09 per square foot.
An investor acquiring this property essentially pays $36.09/sq. ft. for a 3-bedroom brick veneer house equipped with public water, septic system, electricity, block foundation, and a metal roof—a cost far below modern replacement build costs ($150–$200/sq. ft.).
VA Vendee™ Seller Financing Mechanics
A significant highlight of this REO listing is its qualification for VA Vendee™ Seller Financing. Unlike standard VA loans reserved exclusively for military personnel, the VA Vendee™ program offers competitive loan products to both veterans and non-veteran buyers, including real estate investors:
- Low Down Payment: Owner-occupant buyers can secure funding with 0% to 3% down, while non-occupant investors can participate with as little as 5% down.
- No Private Mortgage Insurance (PMI): Eliminates monthly PMI premiums, lowering overall monthly carrying costs.
- Flexible Credit Criteria: Offers streamlined underwriting without strict minimum credit score cutoffs, analyzing overall debt-to-income (DTI) metrics instead.
- Financeable Fees: Funding fees and origination expenses can frequently be rolled into the total loan balance.
Physical Condition Audit & Rehabilitation Scope
While the exterior brick envelope remains structurally intact, listing images confirm that 2704 Highway 2004 has been partially stripped internally and requires a comprehensive cosmetic and mechanical restoration.
Interior Inspection Findings
- Flooring Systems: Existing floor coverings (carpeting and vinyl) have been removed down to the exposed particleboard/plywood subflooring across the living area and bedrooms. The subfloors require minor patching, underlayment installation, and new luxury vinyl plank (LVP) or hardwood flooring.
- Drywall & Interior Finishes: Walls feature dated wallpaper border trims, peeling paint, and drywall tape separation. Complete wallpaper removal, drywall patching, priming, and full interior painting are required.
- Kitchen & Dining Area: The galley-style eat-in kitchen requires a complete gut remodel. Cabinets, countertops, backsplash, sink fixtures, and appliances need full replacement to meet modern tenant or buyer expectations.
- Bathroom Condition: The single full bathroom retains a cast iron/acrylic tub with older tiled surround, older vanity, and basic toilet. While functional, a full cosmetic modernization is recommended.
- HVAC & Electrical Inspection: The property utilizes electric forced-air heating and a heat pump. The age and operational efficiency of the exterior compressor unit must be field-verified. Wiring and service panel capacity should be inspected to ensure compliance with modern codes.
- Lead-Based Paint Hazard: Because the home’s exact construction year is unlisted (estimated pre-1978), lead-based paint precautions must be followed during drywall sanding, window casing removal, and trim restoration.
Exterior Envelope & Outbuildings
- Brick Veneer & Siding: The exterior features a 3-sided brick veneer envelope with vinyl accents along the gables and porch soffits, providing a low-maintenance facade.
- Roofing System: The home is topped with a standing-seam/corrugated metal roof. Public listing notes indicate the metal roof is roughly 3 to 5 years old, offering long-term weather protection.
- Foundation Structure: Concrete block crawlspace foundation. Visual check shows elevated grading along the front elevation, with a side patio and covered front porch.
- Detached Storage Shed: The lot includes a frame-built white storage shed/outbuilding near the rear woodline, providing functional storage for lawn mowers and tractor equipment.
Estimated Itemized Renovation Budget
For an investor targeting a turnkey finish, the following line-item budget details projected capital expenditures (CapEx):
| Renovation Scope Item | Low-End Estimate | High-End Estimate | Work Description & Specifications |
|---|---|---|---|
| Flooring Overhaul | $3,500 | $5,500 | Subfloor prep + 967 sq. ft. Commercial-grade LVP |
| Kitchen Gut Remodel | $6,000 | $10,000 | Shaker cabinets, granite/quartz tops, sink & stainless appliances |
| Full Bath Modernization | $2,500 | $4,500 | New vanity, tub tile surround, toilet, and modern fixtures |
| Drywall, Prep & Paint | $3,000 | $5,000 | Wallpaper removal, drywall repair, primer, full interior paint |
| HVAC Service / Heat Pump Replacement | $1,500 | $6,500 | System inspection, duct cleaning, or full heat pump swap |
| Plumbing & Electrical Upgrades | $2,000 | $4,000 | Fixture swaps, GFCIs, septic tank inspection/pumping |
| Exterior Touch-ups & Landscaping | $1,500 | $3,500 | Brush clearing around home, porch pressure washing, shed repair |
| Contingency Reserve (15%) | $3,000 | $5,500 | Unforeseen structural, plumbing, or lead paint remediation |
| TOTAL ESTIMATED REHAB BUDGET | $23,000 | $44,500 | Projected budget for full interior/exterior renovation |
Geographic, Environmental, & Land Profile
Understanding Jackson County’s physical geography, land contour, and environmental factors clarifies the property’s recreational and residential utility.
Location & Regional Connectivity
2704 Highway 2004 is positioned roughly 2.7 miles off US Highway 421, approximately 10.4 miles northwest of downtown McKee.
- Proximity to Regional Employment Hubs:
- Richmond, KY: ~28 miles North (via US-421 N) — Direct access to Eastern Kentucky University and regional commercial centers.
- Berea, KY: ~22 miles Northwest — Artisanal cultural center with access to Interstate 75.
- Lexington, KY: ~54 miles Northwest — Major metro market reachable within an 1-hour drive.
25-Acre Land Profile & Topography
The 25.00-acre footprint consists of a small grassy house knoll along Highway 2004 that transitions into rolling Appalachian timberland behind the residence:
- Timber Canopy: Primarily native hardwood timber (oak, hickory, yellow poplar) mixed with softwoods, offering private surroundings, wildlife habitat, and potential selective timber harvest value.
- Recreational Capabilities: The acreage provides space for deer and turkey hunting, private trail development for ATVs or side-by-sides, shooting ranges, and small-scale livestock or homesteading.
- Road Frontage: Direct paved access along Kentucky Route 2004 with established off-street gravel parking spaces.
Environmental Risk Assessment
- Flood Risk Factor: 1 / 10 (Minimal Flood Risk). The residence sits on elevated ground well above local stream drainage basins.
- Wildfire Risk Factor: 5 / 10 (Moderate Risk). Typical for heavily timbered mountain acreage in Eastern Kentucky; defensible space should be maintained by clearing brush 30 feet from the structure.
- Wetlands & Slopes: The rear acreage features steep side-slopes characteristic of the Cumberland Plateau, constraining heavy residential construction to the existing front building bench along the highway.
Comparative Market Analysis (CMA) & Investor ROI Scenarios
Evaluating comparative sales in Jackson County helps determine the After-Repair Value (ARV) and projected investment returns for 2704 Highway 2004.
Comparative Market Data Matrix
| Property Address | Distance / Status | Sale Price | Living Area | Acreage | Price / Sq. Ft. | Notes / Condition |
|---|---|---|---|---|---|---|
| 2704 Highway 2004 (Subject) | Active Listing | $89,900 | 967 sq. ft. | 25.00 AC | $92.97 | Requires Full Rehab |
| 2704 Highway 2004 (2023 Sale) | Sold Aug 2023 | $145,000 | 967 sq. ft. | 25.00 AC | $149.95 | Prior turn-key condition |
| 2876 Highway 2004, McKee | Off Market | $172,500 | ~1,100 sq. ft. | 12.00 AC | $156.81 | Good condition, smaller lot |
| 3603 Upper Dry Fork, McKee | Off Market | $166,000 | ~1,050 sq. ft. | 15.00 AC | $158.10 | Updated ranch style |
| 144 Kerby Rd, McKee | Active Listing | $120,000 | 1,200 sq. ft. | 2.50 AC | $100.00 | Older home, minimal land |
Projected After-Repair Value (ARV)
Based on historical Jackson County comp sales ($145,000–$172,500 for updated homes on acreage), a fully renovated 2704 Highway 2004 commands a realistic After-Repair Value (ARV) of $150,000 to $160,000.
Investor Return Profile Scenarios
Assuming an acquisition price of $89,900 and a mid-range rehabilitation budget of $30,000:
Scenario A: Fix-and-Flip Model
- Purchase Price: $89,900
- Estimated Renovation Costs: $30,000
- Holding & Closing Costs (6 Months): $7,500
- Total Investor Capital Basis: $127,400
- Projected Sale Price (ARV): $155,000
- Projected Net Profit: $27,600 (21.6% Return on Investment)
Scenario B: BRRRR Rental Model (Buy, Renovate, Rent, Refinance, Repeat)
- Total Capital Invested: $127,400
- Estimated Monthly Long-Term Rent: $1,050 – $1,200 / month
- Annual Gross Rental Income: $13,200 / year
- Estimated Cash-on-Cash Return: ~8.5% – 10.2% net yield ( factoring low ~$28/yr property taxes)
- Cash-Out Refinance Basis (75% LTV on $155,000 ARV): $116,250 capital returned, leaving less than $11,500 of equity locked in the asset.
Key Advantages vs. Critical Risk Factors
Key Advantages
- Significant Price Discount: Priced 38.0% ($55,100) below its August 2023 sale price of $145,000.
- Substantial Wooded Acreage: Includes 25.00 acres of timberland in the Appalachian foothills.
- VA Vendee™ Seller Financing: Available to non-veteran investors and owner-occupants with 0%–5% down payment options.
- Durable Exterior Envelope: Brick veneer facade, block foundation, and a 3- to 5-year-old metal roof minimize exterior CapEx requirements.
- Low Carrying Overhead: Extremely low annual property taxes (~$8–$28/year) and $0 HOA fees.
- Connected Public Water: Public water service connected along Highway 2004.
Critical Risk Factors
- Required Interior Renovation: Demands a complete interior overhaul (floors, kitchen, bath, paint) before occupancy.
- Septic System Verification Required: Condition of the private septic tank and drain field is unverified and requires hydraulic testing.
- Unknown Construction Age: Pre-1978 lead-based paint precautions apply during renovation work.
- Steep Mountain Topography: The back 20+ acres feature steep side-slopes, limiting additional residential building spots.
Target Buyer Compatibility Matrix
| Buyer Category | Profile Characteristics | Compatibility Fit |
|---|---|---|
| Fix-and-Flip Investors | Buyers seeking REO assets with high equity spread ($89.9k purchase vs. $155k ARV). | Ideal Fit |
| BRRRR / Buy-and-Hold Landlords | Investors taking advantage of VA Vendee financing to build long-term rental equity. | Ideal Fit |
| Homesteaders & Outdoorsmen | Purchasers seeking 25 private acres with a brick house shell to rehab over time. | Ideal Fit |
| First-Time Turnkey Homebuyers | Buyers requiring immediate move-in condition without construction work. | Unfavorable Fit |
Step-by-Step Investor Due Diligence Roadmap
Before submitting an offer or closing on 2704 Highway 2004, prospective purchasers should complete these due diligence steps:
- Perform Hydraulic Septic Inspection: Hire a licensed septic contractor to pump the tank, inspect baffle walls, and conduct a load test on the drain field.
- Audit HVAC & Electrical Infrastructure: Retain an electrician and HVAC technician to test heat pump function, measure compressor draws, and inspect the main panel.
- Submit VA Vendee™ Financing Application: Contact a VA REO servicing agent to verify interest rates, down payment percentages, and buyer pre-approval terms.
- Inspect Boundary Lines & Deeds: Review the county tax map (Parcel #20-44) and verify deeded access boundaries along Highway 2004.
- Estimate Lead Paint Containment Costs: Budget for lead-safe work practices if scraping or sanding painted surfaces inside the residence.
Strategic Final Verdict
2704 Highway 2004 in McKee, Kentucky, represents an appealing value-add real estate opportunity in Eastern Kentucky. Listed at $89,900 for 25.00 acres and a 967 sq. ft. brick ranch, its primary strengths include its 38.0% discount from 2023 market values, qualification for VA Vendee™ seller financing, recent metal roof, and low $28/year property tax carrying cost.
While the home requires a $25,000–$40,000 interior restoration, the resulting After-Repair Value ($150,000–$160,000) offers built-in equity for flippers, landlords, or homesteaders. For buyers equipped to manage a cosmetic overhaul, this property offers solid real estate fundamentals.
Listed on Zillow