First Time Buyer - Off-Market Inheritance Deal

[Adam Michel]

I'm looking to purchase my first property with my fiancé (both 25) with the goal being to establish our primary residence together, as well as giving me the opportunity to add equity/value via rehab before moving on and converting the property into a rental within a year or so to kickstart an investment portfolio.

An interesting lead that recently came up is my parent's neighbor's house. The couple living there was elderly when I was growing up, and we recently found out that they passed away a couple years ago. Their children (now in their late 40s) inherited the house, but they have not listed it on the market, and I heard that neither is willing to move into it from their current setup, so the property has been sitting vacant. I found the son on Facebook and sent a quick intro giving my condolences, expressed my interest in purchasing the property, and provided my phone # in case he decides to follow up.

I'm in the process of preapproval with a couple lenders, and have reached out to a couple realtors in my area to see which may be a good fit. However, seeing as though I have already sourced the deal myself, would it still be in my best interest to use a realtor for this transaction if it works out? 

Any advice on this and experience/tips from others having gone through similar deals would be greatly appreciated!

[Brandon Snyder]

Adam, that off market inheritance lead sounds like a perfect opportunity for a first purchase.. especially since you’ve already built some rapport with the seller’s family. I remember working with a friend who inherited his aunt’s home.. he got so caught up in the emotional side of it that he forgot the nuts and bolts..like having a good plan for the renovation budget and timeline. So the fact you’re already thinking about using your sweat equity to add value is a great sign.

Even though you found this deal on your own, a solid realtor can do more than just open doors for showings. As an invetsment-friendly agent (based out of Houston, TX), I’ve seen how the right professional will help you analyze cash flow, manage comforatble contractor bids, and even drive for dollars if you want a broader look at potential comps or deals in the neighborhood. From what I’ve seen in Bloomberg, it also doesn’t hurt to keep tabs on any shifts in local buying trends.

One more thing I’d consider is the exit strategy. If you’re planning to hold this property as a rental after the rehab, make sure you’ve crunched the numbers on a realistic timeline. Sometimes life happens faster than you think (weddings, job changes, market shifts), so it helps to know your break even point in case you need to move on sooner rather than later. Speaking of which.. what’s your plan if the property needs more updates than expected..would you hold it longer, or look for other creative ways to make it work?