Help needed on potential purchase of rental property

[Alfred Edmonds]

Hi everyone, I am a new investor who is looking to buy a rental property and would like some advice.

I have been working on a home for an out of state owner who wants to get the property ready to put on the market, he is getting married soon and wants to relieve his headache! I know he doesn't want to spend much on getting it ready to sell because he is always balking at my prices which are very reasonable. The house needs $7-10,000 worth of work but for me, that would be more like $3000 in materials plus my sweat.

The house is a 3 bedroom 1 bath zoned R3 and located 5 minutes from a state university with over 30000 students. The garage has been partially converted into living space as well and I could potentially turn it into its own efficiency apartment. I see a lot of potential here and would like to make an offer. Comps in the area are right around $250,000. I would manage the property myself. Rent for the area is around 2000 a month for this type of home and location. I know the town has been giving him lots of grief regarding the upkeep and the fact that they see his renting practices more like a rooming house. There is also a tenant who has been there for 10 years who is a very big pain to the town, he and the owner say he is leaving due to the sale of the house but I know if he decides to stay, he has to go and in Massachusetts that isnt very easy.

My situation is I have very good credit (760) but am self employed so conventional financing is tough. I would like to approach him with a lease option offer, and am curious if there may be better options and how to approach him with the offer to make it most attractive to him. Looking at the County records, it looks as though the Mortgage is paid and he owns it free and clear but I dont know about any other mortgages he may have taken out.

I can make a down payment of $20,000 but I'd like to see what everyone thinks before I approach him.

One other thing of note is that 20 years ago this house was the scene of a pretty grizzly murder and arson! I dont know how much that affects the property in terms of re sale.

I know I have left out plenty of information so feel free to ask!