Family member selling home, what are my options?

[Cole O'Dell]

Hello,

A family member is preparing to sell her home, and we are trying to decide what would be beneficial for us in purchasing her home, and something equitable for them as well.

Here is some of the info:

-Wants to list home on the market for $199k,  her realtor said she would get minimum $175k if she did list it. 

- She owes $90k on the mortgage on the home.

-Home currently has tenants and rents for $1,400/mo. Tenants would likely stay if whoever purchases the home wants to continue renting.

We are trying to decide if we should buy and continue renting, buy and flip, or something else. I am skeptical of the pricing evaluation given by her realtor. The house is older and likely would need upgrades and repairs to get into a good shape, and the neighborhood is not very desirable. Should I get my own realtor to evaluate and see if the conclusion is the same? Can I pull comps myself in some way? The house is probably twice the square footage of the other homes in the neighborhood.

I have been racking my brain for a way to get involved, so I wanted to see what other ideas people might have. 

Thank you in advance!

[Andrew Freed]

@Cole O'Dell - Yes, have another agent do a CMA on it to determine the market value of the property. Additionally, see what current rents because if it rents for $1400 and the cost is $199K, it doesn't sound very profitable as a long term rental. You'd want something closer to the 1% rule.

Also, some other strategies to consider would be a medium term rental, airbnb, seller finance / subject to, novation agreement to flip it with your family member as a partner. I would explore all of those options to see how many exit strategies you have. If you have very few profitable exit strategies, it probably isn't a good deal.