Deal or No Deal

[Michael Garcia]

I've got a property in Chicago that I'm picking up for 276K. 4 Units currently renting at $1150 for three units and $950 for the garden Unit. It's a beautiful brick and Lime Stone 4 story building with a 4 car garage. The seller owes exactly 276k on the property and doesn't want to short sale. She has other offers but is under contract with me. Appraisal came back at 242K. My family is giving me some 25k to cover the shortage. 

I still want it. The cash flow is awesome and I'll buy it with FHA. I like the building so much I will probably live there for a while and if I leave... big money.

BTW average rents for the 3 bed 2 baths of which I have 3 units is $1300 in this area. But my units need a little renovating for all that.

So with mortgage, taxes and insurance we are looking at about $2100 for expenses and with the whole building rented as is we are at $4400 gross rents.

DUN DUN DUNNNNNN!!!   What would you do??

[Elizabeth Colegrove]

Honestly I would never buy a house that is that far under appraisal. It really looks to be too good to be true. What are the other expenses. If she can rent it for so much more than the value why isn't she.